UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                   FORM 10-QSB

                [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                           THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED March 31, 2002

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

            For the transition period from______________ to______________

                         Commission file number 00-28667

                             HOUSEHOLD DIRECT, INC.
             (Exact name of registrant as specified in its charter)



DELAWARE                                                         51-0388634
(State or other                                               (I.R.S. Employer
jurisdiction of                                              Identification No.)
incorporation)


                             HOUSEHOLD DIRECT, INC.
                                  3 GLEN ROAD
                              SANDY HOOK, CT 06482
               (Address of principal executive offices) (Zip Code)


                                 (203) 426-2312
              (Registrant's telephone number, including area code)

                                   ----------
                                      None
          (Former name or former address, if changed since last report)

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


Indicate by check mark whether the registrant  (i) filed all report  required to
be filed by  Section  13 or 15(d) of the  Exchange  Act of 1934  during the past
twelve  months (or for such  shorter  period  that the  registrant  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [ X ] No [ ]

the number of shares  outstanding  of each the issuer's class of common
stock

             CLASS                          OUTSTANDING ON MARCH 31, 2002
           --------                         ----------------------------
         Common stock                             127,174,545

Transitional Small Business Disclosure Format: ___Yes   ____No



                             HOUSEHOLD DIRECT, INC.
                               Table of Contents

Part I.   FINANCIAL INFORMATION
Item 1: Consolidated Financial Statements:

Consolidated Balance Sheets at  March 31, 2002

Consolidated Statements of Operations for the
three Months Ended March 31, 2002 and 2001,
and from inception on May 18, 1998 to
March 31, 2002

Consolidated Statements of Cash Flows for the
three Months Ended March 31, 2002 and 2001,
and from inception on May 18, 1998 to
March 31, 2002

Notes to Consolidated Financial Statements

Item 2: Management's Discussion and Analysis of Financial Conditions and Results
of Operations

Part II. Other Information

Item 6.  Exhibits and Reports on Form 8-K



                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                                 MARCH 31, 2002


                                     ASSETS



CURRENT ASSETS

     Cash and cash equivalents                              $     14,713
     Due from affiliates                                          23,000
                                                               ---------
        Total current assets                                      37,713

     Investment in affiliates                                      6,593
                                                               ---------
        Total nin-current assets                                   6,593

     Property and equipment, net                                  25,550

     Deposits                                                      9,225
                                                               ---------
         TOTAL ASSETS                                        $    79,081
                                                               =========


                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
     Accounts payable                                        $ 2,253,998
     Accrued interest                                             23,559
     Current portion of note payable                              73,031
     Amounts payable to related parties                          371,587
                                                              ----------
         Total current liabilities                             2,722,175
                                                              ----------

SHAREHOLDERS' DEFICIT
     Common stock, 100,000,000 shares of $0.001 par value
         authorized; 127,174,545, Shares issued and
         outstanding at March 31, 2002                           207,683
     Additional paid-in capital                                5,805,669
     Deficit accumulated during the development stage         (8,656,446)
                                                              ----------
         TOTAL SHAREHOLDERS' DEFICIT                          (2,643,094)
                                                              ----------
         TOTAL LIABILITIES AND
              SHAREHOLDERS' DEFICIT                         $     79,081
                                                              ==========

The accompanying notes are an integral part of these consolidated financial
statements.




                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


                                            Cumulative
                                              During
                                           Development
                                               Stage         Three Months Ended
                                           May 18, 1998            March 31,
                                       to March 31, 2002      2002       2001
                                          -----------        -----      ------

 REVENUES:
     Consulting services                  $   330,593    $  22,000   $  32,075
     Service fees                              42,568        6,665      25,810
     Sales                                    283,903           --          --
                                          ------------    --------   ---------
                                              657,064       28,665      57,885
     Cost of Sales                            238,741          --       24,419
                                          ------------    --------   ---------
     Gross Profit                             418,323       28,665      33,466
                                          ------------    --------   ---------
OPERATING EXPENSES:

     Salaries and benefits                  1,364,675          --       71,994
     Research and development                 871,705          --        9,919
     Depreciation and amortization            141,624      24,144       11,657
     Consulting and professional fees       3,477,935     302,252      188,980
     General and administrative             3,266,374      33,601      119,284
                                          ------------   --------     --------
     TOTAL OPERATING EXPENSES               9,122,313     359,997      401,834
                                          ------------   --------    ---------
LOSS FROM OPERATIONS                       (8,703,990)   (331,332)    (368,368)
                                          ------------   --------    ---------

OTHER EXPENSE:
     Interest expense                          28,828          --        4,971
     Loss from subsidiary                     319,737          --           --
     Write-off Inventory and Equipment        197,969      41,700       69,854
                                          ------------   --------    ---------
     TOTAL OTHER EXPENSE                      546,534      41,700       74,825
                                          ------------   --------    ---------

NET LOSS BEFORE INCOME TAX
     AND EXTRAORDINARY ITEM                (9,250,524)   (373,032)    (443,193)
EXTRAORDINARY ITEM FORGIVENESS
  OF DEBT                                     594,079          --           --
                                          ------------   --------      --------
NET LOSS                                  $(8,656,445)  $(373,032) $  (443,193)
                                          ============   ========      ========

Basic and diluted net loss per weighted
     average share of common stock
     outstanding                          $  (.002)       $(.002)   $     (.01)
                                          ============   ========      ========

Weighted average number of shares of
     basic and diluted common stock
     outstanding                          127,174,545  127,174,545   35,288,619
                                          ============ ===========   ==========


The accompanying notes are an integral part of these consolidated financial
statements.


                           HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                                     For the          For the
                                                    Period from     Period from
                                                     January 1,      January 1,
                                                      2002 to         2001 to
                                                     March 31,        March 31,
                                                       2002            2001
                                                  -------------     ------------


CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                            $ (373,032)     $ (443,193)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation & Amortization                           (23,692)         11,657
  Shares issued for services, consulting and
   purchases of Company's                               293,454          45,622
  Write-off Inventory and Equipment                      38,683          69,854
  Write-off Intangibles                                  15,748              --
  Interest paid with stock                                   --              --
 (Increases) decreases in operating assets:
  Accounts receivable                                        --           4,500
  Contracts receivable                                   58,500              --
  Prepaid expenses and other current assets               4,600           4,600
  Inventory                                                  --          15,443
  Increases (decreases) in operating liabilities:
  Accounts payable and accrued salaries                 (23,398)        133,191
  Amounts payable to related parties                     53,670           7,658
  Deferred revenue                                           --              --
                                                       ---------      ---------
Net cash used in operating activities                    44,533        (150,668)
                                                       ---------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Deposits on Web construction                               --       ( 57,031)
  Investment in Software                                     --             --
  Investment in affiliates                              (29,593)            --
  Cash acquired from acquisition of Thunderstick             --             --
  Additions to property and equipment                        --             --
  Deposits as Security                                   (1,472)            --
                                                       ---------      ---------
Net cash used in investing activities                   (31,065)      ( 57,031)
                                                       ---------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Advances on notes payable                                  --         228,502
  Payments on notes payable                                  --         (13,616)
                                                       ---------      ---------
Net cash provided by financing activities                    --         214,886
                                                       ---------      ---------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                       13,468           7,187
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD            1,245              --
                                                       ---------       --------
CASH AND CASH EQUIVALENTS, END OF PERIOD             $   14,713        $  7,187
                                                       =========       ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION
Cash paid during the period for interest                      --             --
                                                       ==========      ========
Cash paid during the period for income taxes                  --            450
                                                       ==========      ========
The accompanying notes are an integral part of these consolidated financial
statements.


                           HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                                           Cumulative
                                                            During
                                                          Development
                                                            Stage
                                                          May 18, 1998
                                                       to March 31, 2002
                                                       -----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                $(8,656,445)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
  Depreciation & Amortization                                 51,135
  Shares issued for services, consulting and
   purchases of Company's                                  3,397,274
  Write-off Inventory and Equipment                           32,683
  Write-off Intangibles                                       15,748
  Interest paid with stock                                    20,500
 (Increases) decreases in operating assets:
  Accounts receivable                                        (63,100)
  Contracts receivable                                        58,500
  Prepaid expenses and other current assets                    4,600
  Increases (decreases) in operating liabilities:
  Accounts payable and accrued salaries                    2,116,361
  Amounts payable to related parties                         213,713
                                                           ---------
                                                           2,632,962

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in affiliates                                  (29,593)
  Cash acquired from acquisition of Thunderstick            (18,720)
  Additions to property and equipment                      (105,801)
  Deposits as security                                      ( 9,228)
                                                           ---------
                                                           (163,342)
Net cash used in investing activities


CASH FLOWS FROM FINANCING ACTIVITIES:
  Stock issued for cash                                    2,699,041
  Cash received on stock subscriptions receivable             38,945
  Advances on notes payable                                   93,000
  Payments on notes payable                                (  19,969)
                                                           ---------
                                                           2,811,017
                                                           ---------
Net cash provided by financing activities


NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                           14,713
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                   --
                                                           --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                  $  14,713
                                                           ========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:
Cash paid during the period for interest                      3,606
                                                             ======
Cash paid during the period for income taxes                     --
                                                             ======

The accompanying notes are an integral part of these consolidated financial
statements.



SUPPLEMENTAL INFORMATION March 31, 2002:

During the six months ended March 31, 2002, the Company issued:

1.  During  the  period  January 1, 2001 to March 31,  2001 the  company  issued
    1,180,833 shares for financial advisory services valued at $45.622.



The accompanying notes are an integral part of these consolidated financial
statements.



                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   ORGANIZATION

On January 2, 1992,  RDI  Marketing,  Inc.  ("RDI") (AKA  HouseHold  Direct) was
formed as a Florida  corporation.  Upon  formation,  RDI issued  1,000 shares of
common  stock.  RDI  essentially  remained  dormant  with no direct or  indirect
business  activity  until  reinstatement  on May 18, 1998. On May 18, 1998,  RDI
adopted a plan of recapitalization whereby the 1,000 shares of common stock were
converted into 1,000,000  shares of .001 par value common stock.  In addition to
the  recapitalization  on May 18, 1998, RDI filed a disclosure  statement  under
Rule 15C2-11 of the Securities and Exchange Act of 1934 (hereafter the "Exchange
Act") with the National Association of Securities Dealers ("NASD"). As a result,
commencing  on June 11, 1998,  RDI's common stock was quoted on the OTC Bulletin
Board.

On July 10, 1998, RDI exchanged 10,000,000 shares of common stock for all of the
outstanding stock of Preferred Consumer Network International, Inc. ("PCNI").

PCNI,  incorporated  on June 13, 1997, was engaged in the business of developing
and  operating  a  wholesale  buying club that,  in  addition  provided  buying,
marketing and financial  services to third party owned  wholesale  buying clubs.
The  traditional  buying club  business  model (the  "Traditional  Model") being
utilized  by PCNI was  predicated  on the  sale of  memberships  to the  general
public,  which  memberships  entitled the holders to purchase goods and services
through the wholesale buying club at wholesale  prices  (exclusive of separately
charged taxes, handling and shipping charges and a processing fee of up to 10%).
During  the fourth  quarter of 1998,  RDI  elected  to suspend  development  and
implementation  of the  Traditional  Model in preference to a new business model
(the "New Model")  predicated on the mass marketing  (through  telemarketing and
the Internet) of memberships. Additionally, the operations of PCNI, based on the
Old Model were suspended and PCNI became inactive. Subsequently, RDI sold all of
the  issued  and  outstanding  capital  stock of PCNI to Mr.  John  Folger  (the
President,  a member of the Board of Directors  and a principle  shareholder  of
RDI) for nominal consideration of $1.00.

RDI, in  furtherance of the  development of the New Model,  entered into several
acquisitions during 1999. On May 7, 1999, the Company acquired all of the common
stock of  Thunderstick  LLC in exchange for  1,000,000  shares of the  Company's
common stock. A shareholder  loaned 500,000 shares to the Company and the shares
were  given  as  50%  of  the  consideration  to  the  former   shareholders  of
Thunderstick.  The Company  recorded a liability  of $5,000 as due to the former
owner of Thunderstick,  pending the issuing of an additional  500,000 shares. In
May 2000,  the  Company  issued  the  additional  500,000  shares to the  former
shareholders  of  Thunderstick  and  charged  off the  liability.  Thunderstick,
through its wholly-owned affiliate Thunderstick Software, LLC, is engaged in the
business of developing and marketing Internet software which will be utilized to
support  the  Company's  Web site and  e-commerce  operations  and in  providing
similar services, on a consulting basis, to third parties.

In July, 1999, RDI, changed its corporate domicile from Florida to Delaware, and
its  name  to  HouseHold  Direct,  Inc.  (the  "Company").  These  changes  were
effectuated by merging the Company into its  wholly-owned  Delaware  subsidiary,
and such merger had no impact on the shareholders or the capital accounts of the
Company.





                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   ORGANIZATION (Continued)

In September,  1999,  the Company  entered into an  acquisition  agreement  with
Megappliance,  Inc.  ("Mega")  pursuant to which the Company agreed to acquire a
Web site (including software,  technology and related commercial  relationships)
in exchange for 124,000 shares of the Company's common stock.

On March 9, 2000,  the  Company  executed an  Agreement  and Plan of Merger with
CrossCheck Corp., a Colorado  corporation  ("Cross") and a Letter Agreement with
the shareholders of Cross. Pursuant to such agreements, the Company merged Cross
(which had no business operations but was registered, and fully reporting, under
the Exchange Act) into the Company so that the Company could achieve  "successor
issuer" status under the Exchange Act. In connection  with such merger which was
consummated  on March 20,  2000,  the Company  paid  $150,000 in cash and issued
100,000  shares of common  stock of the  Company to the former  shareholders  of
Cross. The Company expensed the acquisition in the second quarter of 2000 in the
amount of $164,130.

NOTE  2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity with generally accepted  accounting  principles which contemplate the
continuation of the Company as a going-concern.  However,  the Company is in the
development  stage,  and since  inception has been engaged  primarily in raising
capital and developing its Web site, product,  and market strategy.  The Company
has not generated  significant  revenues from  operations,  and in the course of
funding  product and Web site  development  and other start-up  activities,  has
experienced  cumulative  net losses of $  8,656,445  for the period from May 18,
1998  (inception)  to  March  31,  2002,  and has  used  cash in  operations  of
$2,632,962  for the period from May 18, 1998  (inception) to March 31, 2002. The
Company  expects  that it will  continue  to incur  net  operating  losses as it
expends substantial resources on Web site development and sales and marketing in
an attempt to capture market share and develop market recognition. Management is
continually  trying to raise  additional  capital through  issuance of stock and
debt.  Management of the Company  believes that the  additional  capital that is
expected  to be raised in the future  will be  sufficient  to cover its  working
capital needs until the Company's  revenue volume reaches a sufficient  level to
cover  operating  expenses.  The absence of assurances  of  additional  capital,
raises a  substantial  doubt  about  the  Company's  ability  to  continue  as a
going-concern.   The  consolidated  financial  statements  do  not  include  any
adjustments that might result from the outcome of these uncertainties.
<PAGE>


                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE  2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Principles of Consolidation

The accompanying  consolidated  financial statements include the accounts of the
Company and its wholly-owned subsidiary.  Intercompany transactions and balances
have been eliminated in consolidation.

Research and Development Costs

Research and development costs are expensed as incurred.

Start-up Costs

The Company has  implemented  the Statement of Position 98-5,  "Reporting on the
Costs of  Start-Up  Activities,"  (SOP 98-5)  which  requires  costs of start up
activities to be expensed as incurred.

Revenue Recognition

Revenue for services is recognized  when the service is rendered,  while product
revenue is  recognized  when the  product is  shipped to the  customer.  Revenue
consisted of products sold and shipped pursuant to the operating agreements with
PCNI and PCS, consulting services performed by Thunderstick,  and service income
earned  related to the contract  entered into with Personal  Consumer  Services,
Inc. ("PCS").

Deferred Revenues

Deferred revenues,  as presented on the balance sheet,  relate to unpaid service
agreement  fees  to be paid  by PCS  from  uncollected  accounts  receivable  of
Personal  Consumer  Services,  Inc (PCS).  Due to the  uncertainty of collection
history of PCS, only the fee actually paid by PCS to the Company during the year
and the  first two  months  of 2000 were  recorded  as  revenue.  Only  revenues
projected to be collected in the next year are shown as current.

Property and Equipment

Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line method over the estimated useful lives, ranging from three to five
years. Maintenance and repair costs are expensed as incurred.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107 "Disclosure About Fair Value
of  Financial  Instruments,"  requires  disclosure  about the fair  value of all
financial assets and

                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE  2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

liabilities  for which it is practicable to estimate.  At December 31, 2000, the
carrying value of all of the Company's accounts receivable, accounts payable and
accrued  liabilities  approximate fair value because of their short-term nature.
The note payable carrying value  approximates  fair value based on the borrowing
rate currently available for similar loans

Goodwill/Intangibles

Goodwill reflects the excess of purchase price over the fair value of net assets
purchased and is amortized on a straight-line basis over 3 years.

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid investments with initial maturities of three months or less to
be cash equivalents.

Inventory

Inventory  is  stated  at the  lower  of cost  or  market.  Cost  is  determined
principally on the average cost method.  Inventory of merchandise  available for
resale was $0, at March 31, 2001.  During the first  quarter of 2001 the Company
closed out the  inventory  of  merchandise  it was  holding in its two  Southern
facilities and realized a loss on the sale of $48,613.

Common  Stock Issued for Consideration Other Than Cash

When common stock is issued for  consideration  other than cash, the fair market
value of the  stock or the  fair  market  value  of the  property  or  services,
whichever is more  objectively  determinable is used to record the  transaction.
The quoted market  values of the shares,  restricted  as to  marketability,  are
discounted  for  limited  liquidity.  The  discount  factor is  computed  as the
difference  between the average  price of the shares  issued for cash,  computed
from the  beginning  of the year until the date of  transaction,  and the market
price of the shares at the date of transaction.  The average cash prices, during
the current  year,  are used:  to recognize  substantial  yearly  changes in the
nature  and size of the  Company's  operations;  to reduce  the impact of random
price  movements  associated  with low volume  transactions;  and to incorporate
recently available market value information.

Website Development Costs

The Company accounts for website  development costs in accordance with the AICPA
Statement  of Position  98-12,  "Accounting  for the Costs of Computer  Software
Developed  or Obtained  for  Internal  Use".  Computer  software  costs that are
incurred in the preliminary project stage are expensed as incurred. Internal and
external costs incurred to develop


                             HOUSEHOLD DIRECT, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE  2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

internal-use software during the application  development stage are capitalized.
Post implementation and operation costs of training and maintenance are expensed
as incurred.

Loss per Share

Net loss per share is  computed  by dividing  net loss by the  weighted  average
number of common shares  outstanding for the period. Net loss per share has been
stated for all periods presented in accordance with SFAS No. 128.

Use of Estimates

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

Income Taxes

Deferred income taxes,  reflecting the net tax effects of temporary  differences
between the carrying amount of assets and  liabilities  recognized for financial
reporting purposes and the amounts recognized for income ax purposes,  are based
on tax laws  currently  enacted.  A  valuation  allowance  is  established  when
necessary to reduce deferred tax assts to the amount expected to be realized.

Prospective Accounting Pronouncements

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards No. 141, Business Combinations,  and Statement of
Financial  Accounting  Standards No. 142, Goodwill and Other Intangible  Assets.
Statement No. 141 requires all business  combinations  initiated  after June 30,
2001,  to be  accounted  for using the  purchase  method  of  accounting.  Under
Statement No. 142,  goodwill will no longer be subject to amortization  over its
estimated  useful life.  Rather,  goodwill will be subject to at least an annual
assessment  for  impairment  by applying a  fair-value-based  test. In addition,
Statement No. 142 requires separate  recognition for certain acquired intangible
assets that will continue to be amortized over their useful lives.

NOTE 3.  RELATED PARTY TRANSACTIONS

 Directors,  Officers  and  Shareholders  of the  Company,  John  Folger and Ann
Jameson,   have  entered  into  various  transactions  with  the  Company  since
inception.  The  balance  of the loan due them on March 31, 2001 was $271,689.




                             HOUSEHOLD DIRECT, INC.

Item 2.   Management's Discussion and Analysis.

OVERVIEW

HouseHold  Direct,  Inc. is in the  process of  creating a unique new  "consumer
services membership club" by creating a shopping platform that will offer direct
access  to  "cost-plus   handling   charge"   prices  from   manufacturers   and
distributors.  The Company  believes  manufacturers  are seeking a new  Internet
based consumer  service  solution for the first time,  which can be coupled to a
network of  physical  locations  or service  centers.  Through  its  fulfillment
partners and direct  relationships,  the Company  provides  direct  pricing from
brand name  manufacturers/distributors on their entire current product line. The
Company  believes the  Management  Team when completed will possess the required
skills and  experience  from  corporate  to startup  backgrounds;  and,  will be
experienced in business development,  marketing, operations, web-site design and
management, and database application support.

The Company was initially engaged,  through its subsidiary PCNI, in the business
of developing and operating a wholesale  buying club that, in addition  provided
buying,  marketing and financial  services to third party owned wholesale buying
clubs. The traditional buying club business model (the "Traditional  Model") was
predicated on the sale of  memberships  to the general  public.  The  membership
entitled the holders to purchase goods and services through the wholesale buying
club at  manufacturer  direct prices  (exclusive of  separately  charged  taxes,
handling and shipping  charges and a  processing  fee of up to 10%).  During the
fourth  quarter  of  1998,  the  Company  elected  to  suspend  development  and
implementation  of the  Traditional  Model in preference to a new business model
(the "New Model")  predicated on the mass marketing  (through  telemarketing and
the Internet) of memberships. Additionally, the operations of PCNI, based on the
Old Model were  suspended and PCNI became  inactive.  Subsequently,  the Company
sold all of the issued and outstanding  capital stock of PCNI to Mr. John Folger
(the President,  a member of the Board of Directors and a principle  shareholder
of the Company) for nominal consideration of $1.00.

The services being developed by the Company are expected to create a substantial
benefit for two constituent  groups - consumer and  manufacturer.  The consumers
benefit by a dramatic  reduction in product  prices.  While supplying this price
advantage,  the Company  collects  significant  and valuable  personal  data and
product  preferences  information on the members who purchase  products from the
Company.  This rich demographic product and psychographic data can be helpful to
manufacturers in developing a  consumer-direct,  knowledge based,  product order
and  fulfillment  capability.  These  manufacturers  are expected to  contribute
advertising  dollars  and  participation  fees for these  services.  Value added
service  providers,  such as insurance and financial services can also be allied
strategically with the Company.  This innovative concept of "cost-plus  handling
charge" may position the Company in a groundbreaking  new business  category for
Internet  service  companies  and  informational  content  providers,  and drive
revenue for membership fees and advertising.

The  Company  expects to expand its  membership  base by using a "members  only"
style of telemarketing  program.  Residual monthly membership  revenues could be
increased by the introduction of additional  bundled  services.  The inexpensive
monthly  fee for  core  services  allows  for the  bundling  of  additional  ISP
(Internet Service  Provider),  Telco and utility payment services.  This revenue
stream, coupled with rich consumer data, will become a valuable corporate asset.

Financing efforts will center on: a) guiding the Company from its planning stage
into an aggressive implementation phase, pursuing the consolidation strategy; b)
providing  and  coordinating  a wide range of skills  from  strategic  planning,
market assessment, technology evaluation, financial analysis, deal structure and
negotiation, and financial and legal engineering; c) advisement and coordination
of the near term  expansion of the  management  team and the  nomination  of the
Board of Direcots;  d) providing a full spectrum of investment banking services,
focused  upon a  contemplated  series of  acquisitions  to begin  the  Company's
consolidation  of the  private  wholesale  buying  club  industry;  e)  separate
financing for each acquisition,  combining debt, equity, and/or coordinating the
multi-disciplinary  activities of other experts and advisors to  participate  in
the due diligence and integration process of anticipated acquisitions.

We had signed a definitive  financing  contract for a $10 million  equity credit
line with  JJ&T  Investors,  an  investment  fund  associated  with Wall  Street
Financing Group of Boca Raton,  Florida. The agreement signed with JJ&T has been
replaced by an agreement  with DRH Capital and Dutchess  Private  Equities Fund,
L.P., for the same amount of equity financing and $100,000 bridge-financing.

We are working  out the  schedule  by which to draw  against  the larger  equity
package,  which is related to the Company  filing an amended  SB-2  Registration
Statement which was originally filed in July 2001.

On July 6, 2001 the Company  signed an  agreement  with Family  Savers  Inc.,  a
Charleston,  South Carolina based consumer services  membership club, to acquire
100% of the  assets.  As part of the  agreement,  a  schedule  of cash  payments
extending  to October 31, 2001 was  established.  The  payments  total  $475,000
sellers' compensation,  working capital and debt reduction against total sellers
liability of over $1 million.  The Company made the initial  $50,000  payment as
part of a good faith deposit  required by the  agreement.  As the second $25,000
payment was initiated,  the seller demanded a controlling interest in the public
corporation as a result of a 1 or 2 delay in funds  settlement.  The Company has
declined  this offer,  turned the matter over to counsel for  resolution  and is
awaiting the outcome of this matter.


RESULTS OF OPERATIONS


Revenues

Three Months  Ended March 31, 2002  Compared to the Three Months Ended March 31,
2001

The Company has been in its developmental stage since May 18, 1998. Net Revenues
for the three  months  ended March 31, 2002 were $28,665 as compared to revenues
for the three months  ended March 31, 2001 which were  $57,855  from  consulting
services.

The  Company  has not focused  its  attention  on revenues  until it can get its
financing in place.

From Inception May 18, 1988 to March 31, 2002

Company  revenues earned since inception were $657,064.  Revenues from sale were
$283,903 or 43% of the total  revenues  from  inception.  Consulting  income was
$330,593 which is 50% of the total  revenues,  over the same period.  Membership
fees,  all  earned  from  January 1, 2000,  were  $42,568,  only 7% of the total
revenues.


Operating  Expenses

Three Months  Ended March 31, 2001  compared to the three Months Ended March 31,
2002

Total  Operating  Expenses  other than Cost of Sales for the three  months ended
March 31, 2002 were $359,997 compared with $401,834 for the same period in 2001,
a decrease of 10%.

Salaries  and related  costs  decreased  from $71,994 for the three months ended
March  31,  2001 to $0 for the  three  months  ended  March  31,  2002.  This is
primarily  attributable to the Company's closing the two Southern facilities and
the Company's executives working almost exclusively to arrange financing

Consulting and  professional  fees increased by $113,272 (60%) from $188,980 for
the three months  ended March 31, 2001 to  $302,502,  for the three months ended
March 31, 2002.

Research and development costs are primarily to develop the Company's Web site.

General and Administrative expenses decreased from $119,284 for the three months
ended March 31, 2001 to $33,601 for the same period in 2002.

Liquidity and Future Plans

Three Months  Ended March 31, 2002  compared to the three months Ended March 31,
2001

For the three  months  ended March 31,  2002,  net cash used by  operations  was
$44,553  principally  due to the quarterly loss of $373,032.  This was partially
offset by  depreciation  and  amortization  of  $23,692  and  shares  issued for
services in the amount of $293,454 while current assets and liabilities provided
$93,372.  For the quarter ended March 31, 2001,  net cash used by operations was
$150,668 which was offset by depreciation and amortization of $11,567 and shares
issued for services  $45,622,  while current assets and liabilities used cash of
$165,392.

Cash used by investing activities for the three months ended March 31, 2001 were
principally related to the investment in software $57,031. For the quarter ended
March 31, 2002,  cash used in investing  activities was $31,605,  primarily for
investments in affiliates.

The  Company   anticipates  that  the  current  working  capital  deficiency  of
$2,517,391  will be  supplemented  in the short term by the sale of common stock
and short term borrowing.

From Inception May 18, 1988 to March 31, 2002

The net cash outflow from  operations  was  $2,632,962,  over the period May 18,
1998 to March 31, 2002.  Primarily,  through  issuance of common  stock,  the
Company obtained the funds need to pay for the operating cash deficiency and the
investment of $163,342 in property, equipment, and other assets.

The Company plans to continue the policy of financing its  operations  primarily
through  issuance of common stock for cash and  services  until such time as the
development stage is completed.

Risk Factors

Acquisition Activities

The  growth  plans are  substantially  based on  acquisitions  of  complementary
businesses,  product lines and technology. The acquisition activities may not be
profitable for the following reasons:

1.       Acquisition  agreements  may require  substantial  expense and
         management  time.  Suitable  acquisition  candidates may not be
         found or potential acquisitions consummated.
2.       The acquisitions  terms may turn out to be unfavorable or the acquired
         companies  personnel,  assets, or technology may not be
         successfully integrated into the Company
3.       The Company may have to incur debt or issue equity  securities  to pay
         for any future  acquisition,  the issuance of which may
         be dilutive to our existing stockholders.
4.       The  Company's  products  and  services  may not  receive  market
         acceptance  or the  Company  may not be able to expand  its
         operations in a cost-effective or timely manner.


Dependence on the Internet and Internet Infrastructure Development.


1.    If the  Internet  fails to  develop,  or  develops  more slowly than we
      expect as a  commercial  or  business  medium,  it may adversely affect
      our business.
2.    We expect  competition to intensify in the future  because  barriers to
      entry in the e-commerce  marketplace  are minimal,  and current and new
      competitors can launch new Web sites at a relatively low cost.
3.    We currently compete primarily with other wholesalers and distributors.
      We also compete with the growing number of manufacturers who sell their
      products directly,  either online or through  traditional  distribution
      channels. Many of these manufacturers, wholesalers and distributors are
      larger and have substantially greater resources than we do.
4.    We  expect  to  continually  enhance  and  expand  our  technology  and
      transaction  processing systems,  and network  infrastructure and other
      technologies,  to accommodate increases in the volume of traffic on our
      Web site. We may be  unsuccessful  in these efforts or we may be unable
      to accurately project the rate or timing of increases in the use of our
      Web site.
5.    If competitors  introduce  products and services embodying new
      technologies or if new industry standards and practices emerge,
      then our existing Web sites, proprietary technology and systems may
      become obsolete
6.    While we  contract  with a third  party to provide  back up web hosting
      services,  our  systems  and  operations  are  vulnerable  to damage or
      interruption from fire, flood, power loss,  telecommunications failure,
      break-ins,  earthquake and other third party events and Acts of God. We
      carry no business  interruption  insurance to  compensate us for losses
      that may occur.  In addition,  our security  mechanisms or those of our
      suppliers  may not prevent  security  breaches  or service  breakdowns.
      Despite our  implementation  of security  measures,  our servers may be
      vulnerable to computer  viruses,  physical or electronic  break-ins and
      similar  disruptions.  These events could cause interruptions or delays
      in our business, loss of data or render us unable to accept and fulfill
      orders.

7.    We may not be able  to  convert  customers  from  traditional  shopping
      methods or draw them from our online  competitors.  Among other things,
      our potential  customers may be concerned with shopping at our Web site
      due to shipping costs, delivery time, and product.

8.    Our  Internet  product  sales  currently  are not subject to sales tax,
      except for purchases made in the state of Connecticut.  Nonetheless, if
      individual states or the federal  government choose to impose sales tax
      obligations on out-of-state e-commerce  transactions,  our revenues and
      growth potential may be materially and adversely affected.

9.    The success of the Company's service will depend in large part upon the
      development  and  maintenance  of the  Web  infrastructure,  such  as a
      reliable network  backbone with the necessary speed,  data capacity and
      security.  The  infrastructure  of  complementary  products or services
      necessary  to  make  the Web a  viable  commercial  marketplace  of the
      long-term may not be developed  and,  even if it is developed,  the Web
      may not  become  a  viable  commercial  marketplace  for  products  and
      services  such  as  those  offered  by the  Company.  If the  necessary
      infrastructure, standard or protocols or complementary


     Governmental Regulation of the Internet

1.    The growth and development of the market for online commerce may prompt
      calls for more stringent  consumer  protection laws, both in the United
      States and  abroad,  that may impose  additional  burdens on  companies
      conducting  business  online.  The adoption or  modification of laws or
      regulations  relating  to  the  Internet  could  adversely  affect  our
      business.
2.    . In the future,  more stringent consumer protection laws in the United
      States  and  abroad  could  impose  additional  burdens  on  e-commerce
      companies.  The adoption or  modification  of such laws or  regulations
      could materially and adversely affect our business.






Inability to Continue as a Going Concern  without a Significant  Improvement  in
the Company's Financial Condition

Although we were formed in 1992,  we are still in the  development  stage.  From
inception through March 31, 2001, we had an accumulated deficit of approximately
$7,204,854. We expect that our deficit will continue to increase.  Revenues were
insignificant  are primarily from our membership  service agreement with PCS. We
do not currently have any significant source of membership revenue. At this time
we have no basis to believe that we will ever generate  operating  revenues from
the sale of, or services to, any membership base.

The Company  may not be able to obtain  additional  financing  that is needed to
continue and expand its operations.  If adequate funds are not available, or are
not  available on terms  favorable to us, we may not be able to  effectively  to
continue or complete the implementation of the business plan.


Dependence on Manufacturers, Distributors, Shippers, and Key Personnel

1.       The Company does not have long-term or exclusive  arrangements with any
         supplier,  vendor or distributor  that  guarantees the  availability of
         products  for  purchase or  auction.  From time to time the Company has
         experienced  difficulty in obtaining sufficient product allocation from
         certain  vendors.  If the Company is not able to offer its customers or
         contractors  sufficient  quantities  or  a  variety  of  products,  the
         Company's  business,  financial condition and operating results will be
         materially adversely affected.
2.       We are not certain that any  manufacturer  or distributor  who supplies
         goods or  services  to our  Company  might not  change  their  business
         practices,  adjust their prices, modify their distribution requirements
         or distribution  areas, or do anything else that may make it impossible
         to us to  continually  have  access to the  products  that we intend to
         offer for sale to our "members".
3.       The Company  relies upon third party  carriers to ship the products the
         Company sells.  Therefore,  the Company is subject to risks affecting a
         carrier's  ability to provide  delivery  services to meet its  shipping
         needs. In the past, the Company's  failure to promptly deliver products
         has led to  customer  complaints  and  regulatory  action  against  the
         Company.  Failure to deliver the products the Company sells in a timely
         manner  could  materially  adversely  affect  its  business,  financial
         condition and operating results.

4.       HouseHold  Direct is  currently  wholly  dependent  upon the  personal
         efforts and abilities of our three full-time executive officers,  only
         one of whom, John Folger,  Chief Executive Officer, has any experience
         in the membership club industry.  The loss or  unavailability to us of
         the  services  of  John  Folger  or Ann  Jameson,  Vice  President  of
         Operations,  could have a  material  negative  impact on our  business
         prospects and any potential earning capacity;  and, therefore, we have
         obtained  "key-man"  insurance  on the  lives  of Mr.  Folger  and Ms.
         Jameson in the amounts of $1,000,000 and $1,000,000  respectively.  If
         our level of  operations  significantly  increases,  the  business may
         depend upon our  abilities to attract and hire  additional  management
         and staff  employees.  It is possible that we will be unable to secure
         such additional management and staff when necessary.


Legal Risks

1.       It is  possible  that  claims  could be made  against  online  services
         companies  under both United  States and  foreign  law for  defamation,
         libel,  invasion  of  privacy,   negligence,   copyright  or  trademark
         infringement,  or other theories based on the nature and content of the
         material disseminated through their services.  Several private lawsuits
         seeking to impose such liability upon other online  services  companies
         are currently pending.
2.       In addition, legislation has been proposed in several states, including
         California,  Maryland,  Nevada,  Virginia and  Washington  that imposes
         liability  for, or prohibits the  transmission  over the  Internet,  of
         certain types of unsolicited e-mail or advertisements.
3.       The imposition  upon the Company and other online service  providers of
         potential liability for information carried on or disseminated  through
         their  services  could  require  the Company to  implement  measures to
         reduce its exposure to such liability, which may require the Company to
         expend  substantial  resources  and/or to discontinue  certain  service
         offerings.
4.       The Company does not carry liability  insurance.  Therefore,  any costs
         incurred  by the  Company  as a result of such  liability  or  asserted
         liability could harm the Company's  business,  financial  condition and
         results of operations.
5.       Buyers of the  Company's  products may sue if they are harmed by any of
         the products whose sales the Company facilitates.  Although the Company
         does  not  manufacture  these  products,  the  Company  is  exposed  to
         potential  liability.  Liability  claims  could  require the Company to
         spend  significant  time and money in litigation and to pay significant
         damages,  which could harm the Company's business,  financial condition
         and results of operations. Although the Company intends to disclaim all
         warranties  and rely on the  manufacturers  to fulfill  their  warranty
         obligations,  the Company cannot be certain that the manufacturers will
         be able to fulfill their warranty obligations. In addition, the Company
         believes that some disclaimers may be  unenforceable  under the laws of
         certain foreign jurisdictions.
6.       The U.S. Patent Office recently issued several business-method patents
         having an impact on business conducted on the Internet, among them the
         business-method  patents  relating  to  `one  click'  online  shopping
         transactions (whereby third party affiliates provide certain services,
         including book review, online) issued to Amazon.com. While the Company
         does not believe that any of the business  process  patents  issued to
         date will directly impact the way the Company conducts business, there
         are  no  assurances  that  the  U.S.  Patent  Office  will  not  issue
         additional  business-method patents which could have an adverse impact
         on  the  Company's  business,  forcing  modification  to  some  of the
         Company's business activities in order to avoid possible future claims
         of patent  infringement.  The recent granting of such patents is still
         being challenged.  Furthermore,  the likelihood and ability to enforce
         such broad patents remains  undetermined.  Nonetheless,  the continued
         granting of such broad patents could, in the future, force the Company
         to  change  its  method  of  advertising,  as well as other  important
         aspects of the Company's business, or face the risk of litigation.







                                     PART II
                               OTHER INFORMATION


ITEM 1. Legal Proceedings

        The company is not a party to any material  litigation  and is not aware
        of any  threatened  material  litigation  except  that is has been
        named as a defendant in a civil  lawsuit,  (a)  Orienstar  Finance Ltd.
        vs.  HouseHold Direct,  Inc., et al., Case No.  01CV0598 filed in
        the District  Court, Jefferson  County,  State of  Colorado.  The
        lawsuit  filed on May 21, 2001 alleges that HouseHold  violated  certain
        federal and Colorado  securities laws including  engaging in fraudulent
        conduct and  misrepresentations  to induce  Orienstar to purchase
        $460,000  worth of HouseHold  common  stock. Orienstar is seeking
        return of its $460,000 and rescission of the Purchase Agreement.
        HouseHold has denied any  wrongdoing  and has engaged  Colorado
        counsel to defend the Company.

ITEM 2. Changes in Securities

        The  Company has  increased  the  authorized  shares from 50 million to
        100 million.


ITEM 3. Defaults upon Senior Securities

        None

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

        The amended charter dated July 13, 2001 authorizes the issuance of
        100,000,000 shares of common stock at a par value of $.001 per share.

        In  lieu of a  meeting  and  vote  of  stockholders,  a  majority  of
        the corporation's  stockholders gave written consent to said amendment.


ITEM 5. Other Information

        None

ITEM 6. Exhibits and Reports on Form 8-K

     (a)  List of Exhibits None


     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 hereunto duly authorized.


June 26, 2002                     /s/ John Folger
------------------               ----------------------------------
Date                             President and
                                 Chief Executive Officer