<PAGE>

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


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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


                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001

                         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)


            100 SUNNYSIDE BOULEVARD, WOODBURY, NEW YORK       11797
            (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)        (ZIP CODE)


                                 (516) 677-6100
              (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 MAY 15, 2001:

          2,174,065 SHARES OF COMMON STOCK, PAR VALUE $0.04 PER SHARE.


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

<PAGE>

                           5B TECHNOLOGIES CORPORATION

                    INDEX TO FORM 10-Q FOR THE QUARTER ENDED

                                 MARCH 31, 2001

                                                                        PAGE NO.

PART I - FINANCIAL INFORMATION

     Item 1 - Financial Statements

              Consolidated Balance Sheets
              March 31, 2001 (Unaudited) and December 31, 2000
              (Restated).....................................................1

              Consolidated Statements of
              Operations Three Months Ended
              March 31, 2001 (Unaudited) and 2000 (Unaudited)................2

              Consolidated Statements of Cash
              Flows Three Months Ended March 31,
              2001 (Unaudited) and 2000 (Unaudited)..........................3

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

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

     Item 3 - Quantitative and Qualitative Disclosures About Market
              Risk..........................................................15

PART II - Other Information.................................................16

SIGNATURES..................................................................17
<PAGE>

                          PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                March 31,    December 31,
                                                                  2001          2000
-----------------------------------------------------------------------------------------
                          ASSETS                              (Unaudited)     (Restated)
                          ------
<S>                                                         <C>             <C>
Current assets:
  Cash and cash equivalents                                 $    695,327    $  1,156,436
  Investments available for sale (includes $256,000 and
    $298,000 respectively, restricted as collateral)             503,835         499,778
  Accounts receivable, net of allowance for doubtful
    accounts of $146,000                                         947,720       1,501,523
  Note receivable for services provided                          427,590         427,590
  Other current assets                                           117,625          64,385
-----------------------------------------------------------------------------------------
      Total current assets                                     2,692,097       3,649,712
-----------------------------------------------------------------------------------------
  Goodwill & other intangibles, net                              897,290         939,900
  Net assets of discontinued operations                          661,619       1,247,094
  Other assets                                                   524,101         509,610
-----------------------------------------------------------------------------------------
    TOTAL ASSETS                                            $  4,775,107    $  6,346,316
=========================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Notes payable                                             $    923,310    $    850,159
  Accounts payable                                               711,924       1,129,308
  Accrued expenses                                               158,807         332,273
  Unearned sales revenue                                         120,401         174,527
-----------------------------------------------------------------------------------------
     Total current liabilities                                 1,914,442       2,486,267
-----------------------------------------------------------------------------------------
  Notes payable                                                   10,427          11,928
-----------------------------------------------------------------------------------------
    TOTAL LIABILITIES                                          1,924,869       2,498,195
-----------------------------------------------------------------------------------------
REDEEMABLE PREFERRED STOCK                                     1,250,000       1,250,000
-----------------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:

  Preferred stock, $.01 par value; 5,000,000 shares
    authorized, 1,000 shares issued and outstanding                 --              --
  Common stock, $.04 par value, 17,500,000 shares
    authorized, 2,198,565 and 2,165,036 shares issued and
    outstanding, respectively                                     87,943          86,601
  Additional paid-in capital                                  14,574,233      14,525,450
  Stock subscription receivable                                 (812,500)       (812,500)
  Accumulated deficit                                        (12,198,833)    (11,150,825)
  Treasury stock at cost, 24,500 shares                          (50,605)        (50,605)
-----------------------------------------------------------------------------------------
    TOTAL STOCKHOLDERS' EQUITY                                 1,600,238       2,598,121
-----------------------------------------------------------------------------------------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $  4,775,107    $  6,346,316
=========================================================================================
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      -1-
<PAGE>

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      FOR THE THREE MONTHS ENDED MARCH 31,

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                              March 31,      March 31,
                                                                2001           2000
---------------------------------------------------------------------------------------
                                                             (Unaudited)    (Unaudited)

<S>                                                        <C>            <C>
Net sales                                                  $ 1,603,872    $ 1,916,310
Cost of sales                                                1,220,279      1,255,983
---------------------------------------------------------------------------------------
      Gross profit                                             383,593        660,327
---------------------------------------------------------------------------------------
Expenses:
     Selling                                                   365,005        193,619
     General and administrative expenses                       807,270        730,023
---------------------------------------------------------------------------------------
      Total expenses                                         1,172,275        923,642
---------------------------------------------------------------------------------------
Loss from operations                                          (788,682)      (263,315)
Other income (expense):
      Interest expense                                         (24,267)       (35,146)
      Interest income                                           11,733          9,233
---------------------------------------------------------------------------------------
Loss before provision for (benefit from) income taxes         (801,216)      (289,228)
and discontinued operations
State and local taxes                                           19,806            944
---------------------------------------------------------------------------------------
        Loss from continuing operations                       (821,022)      (290,172)
Discontinued operations:
    Income (loss) from discontinued  operations,  net of
     income taxes of $0 and $80,892 respectively              (681,193)      (181,685)
        Gain on disposal of discontinued operations            472,957       (856,198)
---------------------------------------------------------------------------------------
Net loss                                                   $(1,029,258)   $(1,328,055)

Preferred dividends                                            (18,750)          --
---------------------------------------------------------------------------------------
Net loss attributable to common shareholders               $(1,048,008)   $(1,328,055)
---------------------------------------------------------------------------------------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic and diluted                                            2,160,016      2,135,500

BASIC AND DILUTED LOSS PER COMMON SHARE:

         Continuing operations                             $     (0.39)   $     (0.13)
---------------------------------------------------------------------------------------
         Discontinued operations                           $     (0.10)   $     (0.49)
---------------------------------------------------------------------------------------
         Net loss per share                                $     (0.49)   $     (0.62)
---------------------------------------------------------------------------------------
</TABLE>

         See accompanying notes to consolidated financial statements.

                                      -2-
<PAGE>

                  5B TECHNOLOGIES CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                      FOR THE THREE MONTHS ENDED MARCH 31,

                                    UNAUDITED

<TABLE>
<CAPTION>

                                                                           March 31,     March 31,
                                                                             2001          2000
--------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                    (Unaudited)   (Unaudited)

<S>                                                                     <C>            <C>
  Net loss                                                              $(1,029,254)   $(1,328,054)

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

    Loss from discontinued operations                                       681,193        181,685
    (Gain) loss from disposal of discontinued operations                   (472,957)       856,198
    Depreciation and amortization                                            60,157         69,697
    Issuance of options and warrants for services                              --           16,300
    Changes in operating assets and liabilities:
      Accounts receivable                                                   553,803        117,084
      Other assets                                                          (76,086)       (67,757)
      Accounts payable                                                      (85,788)       (61,412)
      Accrued expenses                                                     (246,345)      (198,149)
--------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES FROM CONTINUING OPERATIONS           (615,277)      (414,408)
--------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES FROM DISCONTINUED
  OPERATIONS                                                                277,352      1,221,087
--------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                        (337,925)       806,679
--------------------------------------------------------------------------------------------------
  CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of investments                                                  (4,057)        (5,522)
    Purchase of equipment                                                    (9,192)          --
--------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES FROM CONTINUING OPERATIONS            (13,249)        (5,522)
--------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES OF
  DISCONTINUED OPERATIONS                                                  (494,081)     2,616,581
--------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                        (507,330)     2,611,059
--------------------------------------------------------------------------------------------------
  CASH FLOWS FROM FINANCING ACTIVITIES:

    Proceeds from sale of common stock                                       50,124           --
    Proceeds from notes payable                                             161,481        142,621
    Repayment of notes payable                                             (421,428)      (412,162)
--------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES FROM CONTINUING OPERATIONS           (209,823)      (269,541)
--------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES FROM
  DISCONTINUED OPERATIONS                                                   593,969     (3,834,345)
--------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                         384,146     (4,103,886)
--------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                            1,156,436      1,003,752
--------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                $   695,327    $   317,604
==================================================================================================


--------------------------------------------------------------------------------------------------
Cash paid for income taxes                                              $     3,399    $     1,694
Cash paid for income taxes for discontinued operations                  $    16,207    $    70,969
Cash paid for interest                                                  $    24,267    $    35,147
Cash paid for interest for discontinued operations                      $    49,574    $   271,136
--------------------------------------------------------------------------------------------------
</TABLE>


         See accompanying notes to consolidated financial statements.

                                      -3-
<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 March 31, 2001
   and its results of operations and cash flows for the three months ended March
   31, 2001 and 2000, respectively, have been included (See Note 2).

   The financial statements for the three months ended March 31, 2001 include
   the results of the Company and its wholly owned subsidiaries. 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, 2000.

2. DISCONTINUED OPERATION

   On May 14, 2001, the Company sold its legal staffing, which was maintained
   through a wholly owned subsidiary, Deltaforce Personnel Services, Inc.
   ("DeltaGroup"), for approximately $1,500,000, plus 50% of DeltaGroup revenue
   in excess of $7.25 million and $7.5 million in the first and second years,
   respectively, after closing. Accordingly, DeltaGroup has been presented
   as a discontinued operation for the three months ended March 31, 2001,
   and the balance sheet as of December 31, 2000 and the statements of
   operations and cash flows for the three months ended March 31, 2000 have
   been restated to conform to this presentation. The loss on disposal of
   DeltaGroup includes provisions for estimated losses of approximately
   $681,000 and a gain on sale, exclusive of contingent consideration, of
   approximately $473,000, for a total loss of approximately $208,000. The
   provision for estimated losses of approximately $681,000 is based on
   management's estimate of future expenses relating to contractual obligations
   and other expenses related to the staffing business. Net sales for
   DeltaGroup were approximately $1,823,000 and $1,967,000 for the three
   months ended March 31, 2001 and 2000, respectively.

   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 as of
   March 31, 2001 and December 31, 2000 and for the three months ended March 31,
   2001 and 2000, respectively. The loss on disposal of Paramount

                                       4
<PAGE>

   includes provisions for estimated losses 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 $156,000 and $1,588,000 for the three
   months ended March 31, 2001 and 2000, respectively.

   The components of net assets of discontinued operation included in the
   Company's Consolidated Balance Sheets at March 31, 2001 and December 31,
   2000, are as follows:

<TABLE>
<CAPTION>

                                                              2001          2000
                                                              ----          ----
<S>                                                       <C>            <C>
   DELTAFORCE PERSONNEL SERVICES, INC.
   Accounts receivable                                        869,927        932,219
   Other assets                                               124,765        122,706
   Goodwill and intangibles                                 1,017,454      1,056,772
   Accounts payable                                           (61,002)       (77,758)
   Accrued expenses                                          (220,876)       (89,574)
   Notes payable                                             (750,000)      (750,000)
                                                         ------------    -----------
                                                              980,268      1,194,365
                                                         ------------    -----------

   PARAMOUNT OPERATIONS INC.

   Accounts receivable                                         51,299        103,528
   Net investment in direct finance and sales-type          3,692,785      3,198,704
   leases
   Assets held under operating leases, net of                 228,216        261,737
   accumulated depreciation
   Other assets                                                     -        162,000
   Accrued expenses                                          (404,057)      (380,317)
   Notes payable                                              (57,744)       (76,384)
   Obligations for financed equipment - non-recourse       (3,829,148)    (3,216,539)
                                                         ------------    -----------
                                                             (318,649)        52,729
                                                         ------------    -----------

                                                         $    661,619    $ 1,247,094
                                                         ============    ===========
</TABLE>

3. LINES OF CREDIT

      At March 31, 2001, the Company had two credit lines available:

      TERM LOAN: In April 1998, Paramount entered into a $500,000 term loan with
a bank collateralized by $600,000 in cash maintained in an investment account.
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 is undergoing negotiations with the bank to
establish repayment terms. As of March 31, 2001, approximately $256,000 remained
outstanding under these loans collateralized by up to $600,000 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. The Company has obtained a

                                       5
<PAGE>

waiver from the bank for non-compliance with the aforementioned covenant for the
three months ended March 31, 2001.

      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. 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 March 31, 2001, 5B Group had $487,000 outstanding under
this line, of which approximately $386,000 is classified as debt and
approximately $101,000 is included in accounts payable. Under the agreement, the
Company's 5B Group subsidiary was not in compliance with the net profit after
tax to revenue ratio of greater than 1%. Pursuant to this default the Company
has received a forbearance agreement from the finance company which states that
the credit facility has been reduced to $500,000 and is payable in full by July
15, 2001. The Company is currently negotiating with the finance company to
initiate a secured credit facility and it is also negotiating with its vendors
to establish terms and plans to utilize, when closed, the Connecticut Bank of
Commerce financing (see below) to replace this credit facility.

      Each of the Company's two 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 credit lines.

      As described above, the Company has received waivers from the lenders
under the Term Loan as a result of the Company's non-compliance at March 31,
2001 with certain covenants under such facility. 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 this facility,
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 credit lines. Among other things, if
such defaults were to occur, any or all of the lenders could declare all
amounts, which aggregated approximately $743,000 as of March 31, 2001, under its
respective credit lines immediately due and payable.

      On April 11, 2001 the Company received a banking commitment from the
Connecticut Bank of Commerce ("CBC") and is currently finalizing the documents
and expects to have the credit facilities in place shortly. The commitment
extends two types of credit facilities:

      5B GROUP REVOLVING CREDIT FACILITY: 5B Group will receive upon the closing
      of the financing a revolving credit facility secured by eligible accounts
      receivable, as defined. The term of the credit facility is two years from
      the date of closing. Borrowings are limited to 75% of eligible accounts
      receivable. The rate of interest charged on the facility will be 1 1/2%
      above the Wall Street prime commercial lending rate.

      MEZZANINE FACILITY: 5B Technologies Corporation will receive upon the
      closing of the financing, a maximum mezzanine facility of $1,500,000, to
      be used for future

                                       6
<PAGE>

      acquisitions and other agreed to purposes. The maximum amount of the
      mezzanine facility will be limited to 110% of the total cash, cash
      equivalents, marketable securities and accounts receivable of the Company
      less the outstanding amount of the revolving credit facility.
      Additionally, the mezzanine facility may not be utilized until either (a)
      the amount of the mezzanine facility to be used is secured by cash
      collateral acceptable to CBC, or (b) (i) the sale of certain material
      assets, (ii) 5B has demonstrated a return to profitability, and (iii) a
      settlement of the redeemable preferred stock. The mezzanine facility will
      mature within two years, or be rolled into the 5B Group revolving credit
      facility. The rate of interest charged on the facility will be 2% above
      the Wall Street prime commercial lending rate.

4.    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 (which was deemed to have an immaterial fair value), 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. On the commitment date, the conversion price
exceeded the market price of the Company's Common Stock. In August, 2000, the
Company and the holders of the Company's Series A Preferred Stock 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

                                       7
<PAGE>

      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.

      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: (i)
redeem all of the remaining shares of Series B Preferred Stock at a price equal
to 120% of the Liquidation Preference, as defined (ii) 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 December 31, 2000, the Series B
Preferred Stock could be converted into 1,618,899 shares of Common Stock, which
exceeds 19.9% (see above).

      FAILURE TO CONCLUDE ACTIONS/OCCURRENCE OF EVENTS. The Company will be
required to redeem the outstanding Series B Preferred Stock at a price equal to
125% of the Liquidation Preference as defined if any of the following events
(among others) were to happen (unless the selling stockholder at the time agreed
with the Company otherwise): (i) if the registration statement is not effective
by September 27, 2000, (ii) if the Company 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, (iii) if the Company becomes bankrupt by court order or if we
voluntarily institute bankruptcy proceedings or if other similar events occur
(iv) 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, (v) 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, the Company
has increased the value of the redeemable preferred stock to $1,250,000. The
Company filed a registration statement relating to the Series B Preferred Stock
and it was declared effective on February 16, 2001.

5.    SEGMENT INFORMATION

      The Company's results of operations are reviewed and managed through two
   segments (i) corporate overhead ("5B") and (ii) Internet, e-commerce and
   systems integration ("5B Group"). The accounting policies of the segments are
   the same as those described in the Summary of Significant Accounting
   Policies, which can be found on pages F-7 through F-11 of the Company's
   Annual Report on Form 10-K (for the year ended December 31, 2000).


                                       8
<PAGE>

The following represents selected financial information for the Company's
segments for the three months ended March 31, 2001 and 2000:


<TABLE>
<CAPTION>

                                 5B       5B Group      Total
        -----------------------------------------------------------
         Three months ended
         March 31, 2001
         -----------------------------------------------------------
<S>                         <C>          <C>          <C>
         Revenues           $     --     $1,603,872   $1,603,872
         Cost of sales            --      1,220,279    1,220,279
         Selling                49,536      315,469      365,005
         General and
           Administrative      144,010      663,256      807,266
         Interest expense        8,642       15,625       24,267
         Pre-tax loss         (190,455)    (610,757)    (801,212)
         Assets             $2,251,005   $2,524,102   $4,775,107

<CAPTION>

         Three months ended
         March 31, 2000
         -----------------------------------------------------------
<S>                         <C>          <C>          <C>
         Revenues           $     --     $1,916,310   $1,916,310
         Cost of sales            --      1,255,983    1,255,983
         Selling                14,275      179,344      193,619
         General and
           Administrative      270,148      459,872      730,020
         Interest expense       12,012       23,134       35,146
         Pre-tax loss         (287,205)      (2,023)    (289,228)
         Assets             $3,344,441   $3,001,875   $6,346,316
         ===========================================================
</TABLE>

                                       9
<PAGE>

ITEM 2.           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 May 14, 2001, the Company sold the majority of its assets related to
its legal staffing subsidiary, Deltaforce Personnel Services, Inc.
("DeltaGroup"), for approximately $1,500,000, plus 50% of DeltaGroup revenue
in excess of $7.25 million and $7.5 million in the first and second years,
respectively, after closing. Accordingly, DeltaGroup has been presented as a
discontinued operation for the three months ended March 31, 2001, and the
balance sheet as of December 31, 2000 and the statements of operations and
cash flows for the three months ended March 31, 2000 have been restated to
conform to this presentation. The loss on disposal of DeltaGroup includes
provisions for estimated losses of approximately $681,000 and a gain on sale,
exclusive of contingent consideration, of approximately $473,000, for a total
loss of approximately $208,000. The provision for estimated losses of
approximately $681,000 is based on management's estimate of future expenses
relating to contractual obligations and other expenses related to the
staffing business. Net sales for DeltaGroup were approximately $1,823,000 and
$1,967,000 for the three months ended March 31, 2001 and 2000, respectively.

      The sale of DeltaGroup was prompted by the Companies commitment to its
technology subsidiary (5B Technologies Group, Inc., "5B Group") and the
DeltaGroup's continued losses. 5B Technologies Corporation ("5B") originally
purchased Deltaforce Personnel Services, Inc. in January 1998 and in July 1998
purchased RBW Staffing Inc. and merged its operations into Deltaforce Personnel
Services, Inc. and renamed the entity DeltaGroup. At that time the Company
planned to be a business solutions provider and offer staffing services in
various areas. As 5B Group continued to expand the management of 5B felt that
the focus of the Company was technology and that the DeltaGroup, being a legal
staffing entity, did not fit the Companies mission and long-term objectives,
which had changed since 1998. 5B also felt, that the DeltaGroup, being in a very
specific niche market, was susceptible to downtrends in the economy, slow downs
by law firms and an increase in unemployment. Based on these factors and a shift
in 5B's mission and long-term objectives 5B decided to sell the DeltaGroup
subsidiary. The sale will bring a new focus to the technology subsidiary,
increased cash reserves and availability and improved financial results in the
future.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31,
2000

      For the three months ended March 31, 2001, the Company recorded sales
revenue of $1.6 million; a $300,000 decrease from the $1.9 million recorded
during the three months ended March 31, 2000. The decrease in sales at 5B Group
is a result of the timing of new projects being authorized, which the Company
believes is due to the economy.

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<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 March 31,
2001, the Company recorded cost of sales of $1.2 million; a decrease of $100,000
compared to the $1.3 million recorded for the three months ended March 31, 2000.
The reason for this decrease is the decrease in related sales and the product
mix of the sales. There were fewer services and more equipment sales for the
three months ended March 31, 2001 compared to the three months ended March 31,
2000 resulting in a lower gross profit.

      Selling expense consists of all sales force salaries, commissions and
associated costs. Selling expense for the three months ended March 31, 2001 was
$365,000, an 88% increase over the $194,000 recorded in the comparable prior
period. 5B Group reported selling expenses of $315,000, or 20%, of revenue for
the three months ended March 31, 2001 compared to $179,000, or 9%, of revenue
for the three months ended March 31, 2000. The increase in selling expenses for
5B Group is predominantly due to the addition of more salespeople.

      General and administrative expenses totaled $733,000 or 46%, of revenue
for the three months ended March 31, 2001, representing an increase of $3,000
compared to the $730,000, or 38%, of revenue recorded during the three months
ended March 31, 2000. 5B Group reported general and administrative expenses of
$663,000 or 41%, of revenue for the three months ended March 31, 2001 compared
to $460,000, or 24%, of revenue for the three months ended March 31, 2000. The
increase is attributable to the Company's expansion and new facilities.

LIQUIDITY AND CAPITAL RESOURCES

      As of March 31, 2001, the Company had $1.2 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. Primarily as a result of the continued
investment in 5B Group and the acquisitions it made in prior years the Company
experienced a decrease in net cash and investments available for sale during the
three months ended March 31, 2001 of $457,052.

      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 March 31, 2001, the Company had two credit lines available:

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<PAGE>

      TERM LOAN: In April 1998, Paramount entered into a $500,000 term loan with
a bank collateralized by $600,000 in cash maintained in an investment account.
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 is undergoing negotiations with the bank to
establish repayment terms. As of March 31, 2001, approximately $256,000 remained
outstanding under these loans collateralized by up to $600,000 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. The Company has obtained a waiver from the bank for non-compliance with
the aforementioned covenant for the three months ended March 31, 2001.

      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. 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 March 31, 2001, 5B Group had $487,000 outstanding under
this line, of which approximately $386,000 is classified as debt and
approximately $101,000 is included in accounts payable. Under the agreement, the
Company's 5B Group subsidiary was not in compliance with the net profit after
tax to revenue ratio of greater than 1%. Pursuant to this default the Company
has received a forbearance agreement from the finance company which states that
the credit facility has been reduced to $500,000 and is payable in full by July
15, 2001. The company is currently negotiating with the finance company to
initiate a secured credit facility and it is also negotiating with its vendors
to establish terms and plans to utilize, when closed, the Connecticut Bank of
Commerce financing (see below) to replace this credit facility.

      Each of the Company's two 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 credit lines.

      As described above, the Company has received waivers from the lenders
under the Term Loan as a result of the Company's non-compliance at March 31,
2001 with certain covenants under such facility. 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 this facility,
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 credit lines. Among other things, if
such defaults were to occur, any or all of the lenders could declare all
amounts, which aggregated approximately $743,000 as of March 31, 2001, under its
respective credit lines immediately due and payable.

      On April 11, 2001 the Company received a banking commitment from the
Connecticut Bank of Commerce ("CBC") and is currently finalizing the documents
and expects to have the credit facilities in place shortly. The commitment
extends two types of credit facilities:

                                       12
<PAGE>

      5B GROUP REVOLVING CREDIT FACILITY: 5B Group will receive upon the closing
      of the financing a revolving credit facility secured by eligible accounts
      receivable, as defined. The term of the credit facility is two years from
      the date of closing. Borrowings are limited to 75% of eligible accounts
      receivable. The rate of interest charged on the facility will be 1 1/2%
      above the Wall Street prime commercial lending rate.

      MEZZANINE FACILITY: 5B Technologies Corporation will receive upon the
      closing of the financing, a maximum mezzanine facility of $1,500,000, to
      be used for future acquisitions and other agreed to purposes. The maximum
      amount of the mezzanine facility will be limited to 110% of the total
      cash, cash equivalents, marketable securities and accounts receivable of
      the Company less the outstanding amount of the revolving credit facility.
      Additionally, the mezzanine facility may not be utilized until either (a)
      the amount of the mezzanine facility to be used is secured by cash
      collateral acceptable to CBC, or (b) (i) the sale of certain material
      assets, (ii) 5B has demonstrated a return to profitability, and (iii) a
      settlement of the redeemable preferred stock. The mezzanine facility will
      mature within two years, or be rolled into the 5B Group revolving credit
      facility. The rate of interest charged on the facility will be 2% above
      the Wall Street prime commercial lending rate.

      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 (which was deemed to have an immaterial fair value), 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. On the commitment date, the conversion price
exceeded the market price of the Company's Common Stock. In August, 2000, the
Company and the holders of the Company's Series A Preferred Stock 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.

                                       13
<PAGE>

      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.

      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: (i)
redeem all of the remaining shares of Series B Preferred Stock at a price equal
to 120% of the Liquidation Preference, as defined (ii) 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 December 31, 2000, the Series B
Preferred Stock could be converted into 1,618,899 shares of Common Stock, which
exceeds 19.9% (see above).

      FAILURE TO CONCLUDE ACTIONS/OCCURRENCE OF EVENTS. The Company will be
required to redeem the outstanding Series B Preferred Stock at a price equal to
125% of the Liquidation Preference as defined if any of the following events
(among others) were to happen (unless the selling stockholder at the time agreed
with the Company otherwise): (i) if the registration statement is not effective
by September 27, 2000, (ii) if the Company 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, (iii) if the Company becomes bankrupt by court order or if we
voluntarily institute bankruptcy proceedings or if other similar events occur
(iv) 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, (v) 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, the Company
has increased the value of the redeemable preferred stock to $1,250,000. The
Company filed a registration statement relating to the Series B Preferred Stock
and it was declared effective on February 16, 2001.

                                       14
<PAGE>

      Because of our present stock price, it is highly unlikely that we will be
able to raise funds through the sale of our equity securities, and our financial
condition prevents us from issuing debt securities. In the event that we are
unsuccessful in our litigation with the holder of our redeemable preferred
stock, we cannot assure you that we will be able to generate funds to enable the
Company to pay its financial obligations. In addition, our auditors included
in their report on our financial statement for the year ended December 31,
2000 in our Form 10-K, an explanatory paragraph about our ability to continue
as a going concern.

INFLATION

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

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 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.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

      "Quantitative and Qualitative Disclosure About Market Risk", on page 24 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
three months ended March 31, 2001.

                                       15
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      PART II:  OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

            None.

                                       16
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                                   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:  May 21, 2001                 By: /s/ Glenn Nortman
                                       -----------------------------------------
                                       Glenn Nortman, Chief Executive Officer

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