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, 2001

              [ ]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.com, 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.com, INC.
                              900 MAIN STREET SOUTH
                          SOUTHBURY, CONNECTICUT 06488
               (Address of principal executive offices) (Zip Code)


                                 (203) 267-1400
              (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, 2001
           --------                         ----------------------------
         Common stock                                35,326,109

Transitional Small Business Disclosure Format: ___Yes   ____No

<PAGE>



                              HOUSEHOLD DIRECT.COM, INC.
                                Table of Contents

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

Consolidated Balance Sheet at March 31, 2001

Consolidated Statements of Operations for the three Months Ended March 31, 2001
and 2000, and from inception on May 18, 1998 to March 31, 2001

Consolidated Statements of Cash Flows for the three Months Ended March 31, 2001
and 2000, and from inception on May 18, 1998 to March 31, 2001

Notes to Consolidated Financial Statements


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

Part II. Other Information

Part II.   Other
Information.....................................................................

 Item 1:  Legal
Proceedings.....................................................................

 Item 2:  Changes in Securities.................................................

 Item 3:  Defaults Upon Senior Securities.......................................

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

 Item 5:  Exhibits and Reports on Form 8-K......................................
<PAGE>


                           HOUSEHOLD DIRECT.com, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                                 MARCH 31, 2001


                                     ASSETS

<TABLE>

CURRENT ASSETS
<S>                                                         <C>

     Cash and cash equivalents                              $       7,187
     Prepaid expenses and other current assets                     76,631
                                                              -----------
         Total current assets                                      83,818

PROPERTY AND EQUIPMENT, net                                        84,324

Intangible assets, net of accumulated amortization                 38,758
Deposits                                                            7,564
                                                              -----------
         TOTAL ASSETS                                        $    214,464
                                                              ===========


                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
     Accounts payable                                         $ 1,584,964
     Accrued salaries                                             507,982
     Current portion of note payable                              236,574
     Amounts payable to related parties                           271,689
                                                              -----------
         Total current liabilities                              2,601,209

NOTE PAYABLE, net of current portion                               23,031
                                                              -----------
         TOTAL LIABILITIES                                      2,624,240
                                                              -----------

SHAREHOLDERS' DEFICIT
     Common stock, 50,000,000 shares of $0.001 par value
         authorized; 35,326,109, Shares issued and
         outstanding at March 31, 2001                             35,251
     Additional paid-in capital                                 4,794,182
     Common stock subscriptions receivable                        (34,355)
     Deficit accumulated during the development stage          (7,204,854)
                                                              -----------
         TOTAL SHAREHOLDERS' DEFICIT                           (2,409,776)
                                                              -----------
         TOTAL LIABILITIES AND
              SHAREHOLDERS' DEFICIT                         $     214,464
                                                              ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.




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

                                                                      Cumulative
                                                                          During
                                                                     Development
                                                                      Stage                     Three Months Ended
                                                                 May 18, 1998                        March 31,
                                                              to March 31, 2001                2001             2000
                                                               --------------               ---------        ---------
<S>                                                           <C>                        <C>                <C>
 REVENUES:
     Consulting services                                      $      259,793             $    32,075        $    32,625
     Service fees                                                     61,713                  25,810             11,907
     Sales                                                           236,357                      --                 --
                                                              --------------             -----------        -----------
TOTAL REVENUES                                                       557,863                  57,855             44,532
                                                              --------------             -----------        -----------

OPERATING EXPENSES:
     Cost of Goods Sold                                              238,741                  24,419                 --
     Salaries and benefits                                         1,188,074                  71,994            129,011
     Research and development                                        747,587                   9,919             53,311
     Depreciation and amortization                                   103,862                  11,657            161,604
     Consulting and professional fees                              2,132,403                 188,980            284,230
     General and administrative                                    2,955,647                 119,284            364,321
                                                              --------------             ------------       -----------
     TOTAL OPERATING EXPENSES                                      7,366,314                 426,253            992,477
                                                              --------------             ------------       ------------
LOSS FROM OPERATIONS                                              (6,808,451)               (368,368)          (947,945)
                                                              --------------             ------------       ------------

OTHER EXPENSE:
     Interest expense                                                  6,812                   4,971                215
     Loss from subsidiary - PCNI                                     319,737                      --                 --
     Write-off Inventory and Equipment                                69,854                  69,854                 --
                                                              --------------             -----------        -----------
     TOTAL OTHER EXPENSE                                             396,403                  74,825                215
                                                              --------------             -----------        -----------

NET LOSS BEFORE INCOME TAX
     PROVISION                                                    (7,204,854)               (443,193)           948,160

INCOME TAX PROVISION                                                      --                      --                 --
                                                              --------------             -----------        -----------

NET LOSS                                                      $   (7,204,854)            $  (443,193)       $   948,160
                                                              ==============             ===========        ===========

Basic and diluted net loss per weighted
     average share of common stock
     outstanding                                              $        (0.33)           $      (.01)        $     (.04)
                                                              ==============            ============        ===========

Weighted average number of shares of
     basic and diluted common stock
     outstanding                                                  21,666,680             35,288,619          22,475,296
                                                              ==============            ============        ===========

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.





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

<TABLE>

                                                             For the          For the           Cumulative
                                                            Period from     Period from          During
                                                             January 1,      January 1,        Development
                                                              2001 to         2000 to            Stage
                                                             March 31,        March 31,        May 18, 1998
                                                               2001            2000         to March 31, 2001
                                                          -------------     ------------     -----------------

<S>                                                        <C>                <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                 $   (443,193)   $ (  948,160)   $  (7,204,854)
   Adjustments to reconcile net loss to net cash
     used in operating activities:
       Depreciation                                                8,424          10,818           87,150
       Amortization                                                3,233         150,786           16,712
       Shares issued for services, consulting and
        purchases of Company's                                    45,622         145,000        2,618,249
       Write-off Inventory and Equipment                          69,854              --           69,854
       Interest paid with stock                                       --              --           20,500
       (Increases) decreases in operating assets:
           Accounts receivable                                     4,500        (652,872)              --
           Prepaid expenses and other current assets               4,600        ( 84,749)              --
           Inventory                                             (15,443)       ( 36,290)         (48,613)
       Increases (decreases) in operating liabilities:
           Accounts payable and accrued salaries                 133,191         216,841        2,092,946
           Amounts payable to related parties                      7,658        ( 65,789)         271,689
           Deferred revenue                                           --         612,688               --
                                                             -----------     -----------       ----------
              Net cash used in operating activities             (150,668)       (651,727)      (2,076,367)
                                                             -----------     -----------       ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Deposits on Web construction                               ( 57,031)             --        ( 64,595)
     Investment in Software                                           --              --        ( 36,750)
     Cash acquired from acquisition of Thunderstick                   --              --        ( 18,720)
     Additions to property and equipment                              --        ( 42,124)       (192,715)
     Investment cross check                                           --        (149,750)             --
                                                              ----------      ----------        ---------
              Net cash used in investing activities             ( 57,031)       (191,874)       (312,780)
                                                              ----------      ----------        ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Stock issued for cash                                            --       1,059,187       2,156,329
     Advances on notes payable                                   228,502              --         259,605
     Payments on notes payable                                   (13,616)       (  1,338)        (19,600)
                                                              ----------      ----------       ---------
              Net cash provided by financing activities          214,886       1,057,849       2,396,334
                                                              ----------      ----------       ---------

NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS                                                 7,187        214,248            7,187

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                        --         31,013               --
                                                              ----------      ----------        ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                    $      7,187    $   245,265        $   7,187
                                                              ==========      ==========        =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION
         Cash paid during the period for interest                   450             215            2,340
                                                             ==========      ==========         =========
         Cash paid during the period for income taxes               --              --                 --
                                                             ==========      ==========         =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.



SUPPLEMENTAL INFORMATION March 31, 2001:

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.

<PAGE>


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

NOTE 1.   ORGANIZATION

On January 2, 1992, RDI Marketing,  Inc. ("RDI") (AKA HouseHold  Direct.com) 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.com,  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.


<PAGE>


                           HOUSEHOLD DIRECT.COM, 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 $  7,204,854  for the period from May 18,
1998  (inception)  to  March  31,  2001,  and has  used  cash in  operations  of
$2,076,367  for the period from May 18, 1998  (inception) to March 31, 2001. 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.COM, 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
<PAGE>
                           HOUSEHOLD DIRECT.COM, 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
<PAGE>

                           HOUSEHOLD DIRECT.COM, 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 assets to the amount expected to be realized.

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.

<PAGE>

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



NOTE 4.  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at March 31, 2001:
<TABLE>
           <S>                                  <C>

           Office and Computer equipment     $   49,290
           Motor Vehicles                        49,565
           Computer software                     25,452
                                                -------
                                                124,307
            Less:  accumulated depreciation   (  39,983)
                                               --------

                                              $  84,324
                                                =======
</TABLE>
Depreciation expense for the period ended March 31, 2001 was $8,424 . During the
first  quarter  of 2001 the  Company  sold  off its  equipment  in its  Southern
operations and realized a loss of $21,241.

NOTE 5.  INTANGIBLE ASSETS/GOODWILL
<TABLE>
       <S>                                        <C>

       Investment CISI                            $36,750
       Investment Megappliance                     18,720
                                                   ------
        Total                                      55,470

       Less:  Accumulated Amortization             16,712
                                                   ------
                                                  $38,758
                                                   ======
</TABLE>

For the quarter  ended March 31, 2001,  amortization  of  Intangible  Assets was
$3,233.

<PAGE>

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

NOTE 6.  NOTES PAYABLE

On April 7, 1999, the Company entered into a note payable agreement with a third
party for $13,500.  A $2,500  payment was made by the Company.  The note payable
bears  interest at 12% per annum and  requires  monthly  principal  and interest
payments of $518 beginning May 1, 1999. The balance of note payable,  $2,020, is
payable by May 1, 2001.

On August  18,2000,  the Company  entered into a note payable  agreement  with a
third  party for $35,525 to  purchase  an auto.  A $540  payment was made by the
Company at the signing of the agreement.  The note bears interest at 2.16% which
is an  inducement  by the auto  Company to attract  buyers.  The Company has not
discounted the value of the asset purchased to better reflect the market rate of
interest. Monthly payments are $561.70 and the note expires on July 18, 2005.

<TABLE>
                    <S>                           <C>


                    2001                      $   4,539
                    2002                          6,212
                    2003                          6,376
                    2004                          6,545
                    2005                          3,898
                                                 ------
                                               $ 27,570
                                                 ======
</TABLE>

During the first quarter of 2001 the Company issued the following notes:

<TABLE>

           Date               Amount               Rate          Term          Collateral
          <S>                 <C>                  <C>            <C>           <C>

           02/02/01           $100,000               12%         60 days      Assets of Borrower
           02/12/01           $ 50,000               12%         60 days      Assets of Borrower
           02/15/01           $ 50,000               18%        150 days      N/A
           03/13/01           $ 30,000               12%         60 days      Assets of Borrower
                              --------
                              $230,000

</TABLE>

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


NOTE 7.  COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases  certain office space under an operating  lease that requires
monthly  rental  payments of  approximately  $2,522 and expires  April 30, 2002.
Total rent expense  related to this lease  totaled  $7,566 for the quarter ended
March 31, 2001.

Future minimum lease payments are as follows:

Quarter ended March 31, 2001:
<TABLE>
                     <S>                                  <C>

                     2001                                $ 24,300
                     2002                                   8,025
                                                          -------
                                                         $ 32,325
                                                          =======
</TABLE>


NOTE 8.  CAPITAL STOCK

Common Stock Shares  Issued

During 1998,  the Company  issued an aggregate  of  12,917,000  shares of Common
Stock at $.001 par value  ("the  Common  Stock").  The  aggregate  consideration
received by the Company in connection with the issuance of such shares consisted
of (a) $175,961 in the form of cash  payments,  received in connection  with the
issuance of 1,627,095 shares, (b) $100,540 in the form of services performed for
or an behalf of the Company  received in connection with the issuance of 914,000
shares,  (c) 175,905  shares  issued in lieu of interest of $20,500:  and (d) on
December 28, 1998,  the Company  issued  200,000 shares at $0.25 per share to an
unrelated  third party under the terms of a stock  subscription  agreement;  the
amount is payable on demand.

The  outstanding   stock   subscriptions  are  classified  in  the  accompanying
consolidated balance sheets and statement of changes in shareholders' deficit as
a contra account to shareholders'  deficit. No payments for stock subscriptions,
were  received as of December  31, 1998.  The Company  also  received all of the
outstanding  shares of the capital stock of PCNI in connection with the issuance
of (e) 10,000,000  shares of the Company's common stock.  The 10,000,000  shares
were recorded as common stock subscriptions  receivable since it was deemed that
the  purchase  of PCNI  resulted  in little to no value to the  Company.  During
calendar year 1999, the Company issued an additional  6,323,304 shares of Common
Stock ("the Additional  Shares");  and in connection with such issuance received
(f)  $902,179  in the form of cash in  connection  with  issuance  of  4,784,504
Additional  Shares,  (g) $369,372 in the form of services in connection with the
issuance of 1,488,800  Additional  Shares; and (h) on April 6, 1999, the Company
issued  50,000  shares at $0.46 per share to an unrelated  third party under the
terms of a stock  subscription  agreement;  the amount is payable on demand. The
outstanding  amounts are  classified in the  accompanying  consolidated  balance
sheets and statement of changes in shareholders'  deficit as a contra account to
shareholders' deficit. A total amount of $38,645 was received as of December 31,
1999 in respect of all stock  issued for  subscriptions  receivable.  The $9,999
stock  subscriptions  receivable  related to the PCNI transaction were reclassed
against the amounts payable to related parties balance at December 31, 1999.

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



NOTE 8.  CAPITAL STOCK (Continued)

All stock for  services  were valued at the average  stock for cash value .01 to
 .50 in 2000 ($.19 in 1999 and $.11 in 1998).  However,  where specific values of
services could be determined, those values were used to record the transactions.

The quoted market values of the shares,  restricted  as to  marketability,  were
discounted  for  limited  liquidity.  The  discount  factor was  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.  The computed  discount  factors
ranged  between 37% to 47.6% of the market values in the year ended December 31,
2000,

Detail Stock Transactions

For the period from May 18, 1998 to March 31, 2001,  for the common stock of the
Company,  the dates of issuance,  number of shares issued, type of consideration
received, and the value of the shares issued are presented below:

1998


<TABLE>
<S>                          <C>                            <C>                    <C>
                                                            Number of
                             Issue Date                       Shares             Amount
Stock issued in for cash:
                               May 18                         1,000,000         $    1,000
                               August 20                        125,000             13,750
                               October 2                        245,000             51,500
                               October 6                        200,000                500
                               October 20                        50,000              1,000
                               October 9                        135,000              8,100
                               November 6                       792,095             92,311
                               November 24                       55,000              6,050
                               December 3                        25,000              2,750
                                                            -----------           --------

                                                              1,727,095            176,961
Stock issued in lieu of interest:
                               November 20                      175,905             20,500

Stock issued for acquisition of PCNI:
                               July 10                       10,000,000             10,000
Stock issued for subscriptions receivable:
                               December 28,                     200,000             50,000
Stock issued for services:
                               August 26                        100,000             11,000
                               September 17                     180,000             19,800
                               October 6                        224,000             24,640
                               October 20                       100,000             11,000
                               November 16                      210,000             23,100
                               November 23                       25,000              2,750
                               December 8                        50,000              5,500
                               December 15                       25,000              2,750
                                                               --------            -------

                                                                914,000            100,540
                                                                -------            -------

                               Total 1998                    13,917,000          $ 358,001
                                                             ==========            =======
</TABLE>
<PAGE>


                             HOUSEHOLD DIRECT.COM
                           (DEVELOPMENT STAGE COMPANY)
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 8. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

1999
----
<TABLE>
<S>                                 <C>                       <C>                   <C>

                                                             Number of
                                    Issue Date                 Shares                Amount
                                    ----------                ---------            --------
Stock issued in 1999 for cash:
                                    February 2                  150,000           $   35,500
                                    February 11                 101,000               46,020
                                    February 16                  50,000               23,000
                                    February 18                 100,000               46,000
                                    February 19                 250,000               98,250
                                    February 23               1,300,000              130,000
                                    February 25                 100,000               19,000
                                    March 3                     369,109               60,189
                                    March 8                     200,000               38,000
                                    March 18                    550,000              136,355
                                    March 19                    300,000               75,000
                                    May 4                       505,000               11,870
                                    May 14                      100,000               15,645
                                    December 6                  494,117               80,000
                                    December 20                 215,278               87,350
                                                              ---------             --------

                                                              4,784,504           $  902,179
Stock issued for subscriptions receivable:
                                     April 6                     50,000           $   23,000
Stock issued for services:
                                    February 2                  150,000           $   57,300
                                    February 11                 138,300               26,277
                                    February 23                 195,000               37,050
                                    March 1                     100,000               76,700
                                    March 3                      50,000                9,500
                                    May 4                        70,000               13,300
                                    August 2                     15,000                2,850
                                    August 9                    100,000               19,000
                                    September 22                 86,500               16,435
                                    December 6                  515,000               97,850
                                    December                     69,000               13,110
                                                             ----------             --------

                                                              1,488,800              369,372

                                    Total 1999                6,323,304          $ 1,294,551
                                                              =========            =========

</TABLE>
<PAGE>


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

NOTE 8. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

2000

<TABLE>
<S>                                 <C>                       <C>                 <C>
                                                               Number of
                                    Issue Date                   Shares             Amount
Stock issued in 2000 for cash:
                                    January 3                   215,000          $  191,586
                                    January 19                  385,000             292,600
                                    April 3                     442,478             435,000
                                    April 3                     180,000              90,000
                                    May 31                      210,527              40,000
                                    October 6                   408,359             122,507
                                    October 20                  384,650              50,000
                                    November 7                  145,000              25,000
                                    November 27                 250,000              15,000
                                                              ---------           ---------

                                                              2,621,014           1,261,694
Stock issued for cash and services
                                    January 3                 1,000,000          $  524,266

Stock issued to related parties as return of loan of shares:
                                    August                      500,000               5,000
                                    August 7                    124,000              34,720
                                                                -------             -------

                                                                624,000              39,720
Stock issued to officers in lieu of salaries:
                                    December 11                  22,500                1845
                                    December 27               1,785,714             101,328
                                    December 27               1,116,072              63,330
                                                              ---------            --------

                                                              2,924,286             166,504

Stock issued for payment of loans made to the Company:
                                    December 27               2,857,142             162,125

Stock issued to purchase corporate shell (CrossCheck):
                                    May 8                       100,000              34,642

Stock issued to acquire consulting business (Thunderstick):
                                    May 31                      500,000               5,000

</TABLE>

<PAGE>


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

NOTE 8. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

2000
<TABLE>
<S>                                                             <C>             <C>

                                                               Number of
                                    Issue Date                   Shares          Amount

Shares issued for research and development- Website
                                    January 26                  200,000       $  131,067
                                    June 14                       3,800            1,011
                                    November 7                   82,570           10,412
                                    November 8                   69,725            8,794
                                                                 ------        ---------

                                                                356,095          151,284

Stock issued for investor relations, consulting, technical, and professional
   fees:
                                    January 3                   125,000       $   98,300
                                    January 3                   125,000           98,300
                                    January 3                    50,000           39,320
                                    January 3                    25,000           19,660
                                    February 5                   50,000           24,641
                                    May 26                      300,000           81,657
                                    August 11                    40,000            9,898
                                    July 3                      100,000           22,889
                                    August 16                    40,000           11,135
                                    October 16                  230,000           33,353
                                    October 19                  200,000           25,220
                                    October 26                  500,000           69,354
                                    November 1                   50,000            6,305
                                    November 2                    8,000            1,110
                                    November 2                  500,000           69,354
                                    November 3                   35,435            4,915
                                    November 3                   25,000            3,468
                                    November 3                   32,000            4,439
                                    November 8                   32,000            4,035
                                    November 28                  45,000            5,107
                                    December 4                  360,000           24,967
                                    December 4                   25,000            1,734
                                    December 7                   25,000            1,734
                                                                 ------         --------

                                                              2,922,435          660,892
                                                              ---------         --------

                                    Total 2000               13,904,972      $ 3,006,128
                                                             ==========        =========

</TABLE>
<PAGE>

                            HOUSEHOLD DIRECT.COM, INC.
                           (DEVELOPMENT STAGE COMPANY)
                     NOTES TO FINANCIAL STATEMENT (CONTINUED)


NOTE 8. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

2001
<TABLE>
Shares issued for financial consulting services in 2001

              <S>                         <C>             <C>
                                       Number of
              Issue Date                 Shares             Amount

              January 2                  250,000       $     9,450
              February 15                303,333            15,287
              March 30                   552,500            20,885
                                       ---------         ---------

                                       1,180,833            45,622
</TABLE>
<PAGE>

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

NOTE 9.  STOCK GRANTS, OPTIONS AND WARRANTS

The Company has a nonqualified  stock option plan that provides for the granting
of the options to employees and consultants. The option price, number of shares,
and grant  date are  determined  at the  discretion  of the  Company's  Board of
Directors.  Grantees  vest in the options at various  intervals as determined by
the Board of Directors.  Options  granted under the plan are  exercisable  for a
period of up to five years from the grant  date.  Options  were also  granted to
third parties to obtain capital.

During the year 2000 and the first  quarter of 2001, no new options were granted
and no options were exercised.

The balance of options and  warrants  outstanding  as of December 31, 2000 is as
follows:
<TABLE>
       <S>          <C>         <C>         <C>    <C>    <C>    <C>

      Date        Number of      Exercise     Expiration        Outstanding
     Issued         Shares        Price          Date              Value
     ------       ----------    ----------     -------------     ----------

     11/11/99       610,000        1.35          12/1/04        2,025,000
     11/11/99     2,800,000         .15          11/1/04          420,000
                                                                ---------

                   Value of options                             2,445,000
                                                                =========
</TABLE>

The Company accounts for its stock based awards to employees using the intrinsic
value  method  in  accordance  with APB 25,  "Accounting  for  Stock  Issued  to
Employees," and its related  interpretations.  Deferred  compensation of $15,000
was recorded in accordance  with APB 25. The fair value of each option grant was
estimated in  accordance  with SFAS 123 using the  Black-Scholes  option-pricing
model with the following weighted-average assumptions:

           1999
<TABLE>
             <S>                                  <C>

             Dividend Yield                       0.0%
             Expected Volatility                  0.294%
             Risk-free rate of return             6.8%
             Expected life                        5 Years
</TABLE>

Compensation  costs for stock options determined at the grant date in accordance
with the fair value  method  consistent  with SFAS 123,  requires no  additional
amounts in compensation  costs to be recognized for the years ended December 31,
1999 and 1998 as fair market value calculated using the Black-Scholes model, was
lower than the option  prices in all cases.  Where  options were issued to third
parties for services rendered,  the value of the consideration  received is used
to record the  transactions,  as allowed by SFAS 123. A total amount of $110,131
was recorded in 1999 on this basis.  This amount is included in consulting  fees
in the accompanying consolidated statements of operations.


<PAGE>
                           HOUSEHOLD DIRECT.COM, INC.

Item 2.   Management's Discussion and Analysis.

OVERVIEW

HouseHold Direct.com,  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.

The Company has retained a boutique investment banking firm in Atlanta,  Georgia
to advise on strategic transactions and related financings.

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 Directors; 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 have signed a definitive  financing  contract for a $10 million equity credit
line  with JJT  Investors,  an  investment  fund  associated  with  Wall  Street
Financing Group of Boca Raton, Florida.

A  bridge-financing  package of $250,000 is part of the larger  agreement,  from
which the Company  has  already  drawn  $50,000.  The  Company  intends to focus
working  capital upon  immediate  needs of the core  operation to ensure ongoing
financial  stability  and  the  rapid  implementation  of its  consolidation  by
acquisition strategy.

We are working  out the  schedule  by which to draw  against  the larger  equity
package,  which is related to the Company filing an SB-2 Registration  Statement
in the near future.

RESULTS OF OPERATIONS


Revenues

Three Months  Ended March 31, 2001  Compared to the Three Months Ended March 31,
2000


The Company has been in its developmental stage since May 18, 1998. Net Revenues
for the three  months  ended March 31, 2001 were $57,855 as compared to revenues
for the three months ended March 31, 2000 which were  $44,532.

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, 2001

Company revenues earned since inception were $557,863.  Revenues from sales were
$236,357 or 42% of the total  revenues  from  inception.  Consulting  income was
$259,793 which is 46% of the total  revenues,  over the same period.  Membership
fees, all earned from January 1, 2000, were only 12% of the total revenues.


Operating  Expenses

Three Months  Ended March 31, 2000  compared to the three Months Ended March 31,
2001

Total  Operating  Expenses  other than Cost of Sales for the three  months ended
March 31, 2001 were $377,415 compared with $992,477 for the same period in 2000,
a decrease of 61%.

Salaries and related  costs  decreased  from $129,011 for the three months ended
March 31,  2000 to $71,994 for the three  months  ended  March 31,  2001;  a 44%
decrease.  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 decreased by $95,250 (34%) from $284,230 for
the three months  ended March 31, 2000 to  $188,980,  for the three months ended
March 31, 2001.

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

General and Administrative expenses decreased from $364,321 for the three months
ended March 31, 2000 to $119,284 for the same period in 2001.

Liquidity and Future Plans

Three Months  Ended March 31, 2001  compared to the three months Ended March 31,
2000

For the three  months  ended March 31,  2001,  net cash used by  operations  was
$150,668  principally due to the quarterly loss of $443,193.  This was partially
offset by depreciation  of $8,424,  amortization of $3,233 and shares issued for
services in the amount of $45,622 while current assets and liabilities  provided
$165,392.  For the quarter ended March 31, 2000, net cash used by operations was
$161,604 which was offset by depreciation and amortization of $23,610 and shares
issued for services $145,000,  while current assets and liabilities used cash of
$10,171.

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, 2000,  cash used in investing  activities was $191,874,  primarily for
the acquisition of property and equipment amounting to $42,124.

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, 2001

The net cash outflow from  operations  was  $2,076,367,  over the period May 18,
1998 to March 31, 2001. Primarily, through issuance of common stock, the Company
obtained  the funds  needed to pay for the  operating  cash  deficiency  and the
investment of $255,749 in property, equipment, and other assets. The use of debt
to offset cash deficiency was $259,605.

The net loss of the Company was $7,204,854.  The loss was  essentially  financed
through  issuance  of  $2,156,329  common  stock  for  cash and  $2,618,249  for
services.  The  issuance of common  stock  provided  66% of the net loss amount.
Essentially,  accounts payable and accrued  salaries of $2,092,946  provided the
additional 34% of the funding for the net loss.

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 $7,204,854.
We  expect  that  our  deficit  will   continue  to  increase.   Revenues   were
insignificant  which 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
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.

ITEM 2. Changes in Securities

        None

ITEM 3. Defaults upon Senior Securities

        None

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

        None

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.


May 21, 2001                     /s/ John Folger
------------------               ----------------------------------
Date                             President and
                                 Chief Executive Officer