U.S. SECURITIES AND 53EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-KSB

               [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31,2001
                         Commission file number 0-12183



                           HOUSEHOLD DIRECT INC.

             (Exact name of registrant as specified in its charter)

                               Delaware 51-0388634
        (State or other jurisdiction of (IRS Employer Identification No.)
                         Incorporation (or Organization)

                                   3 Glen Road
                              Sandy Hook, CT 06482
                    (Address of principal executive offices)

                                 (203) 426-2312
                            Issuer's telephone number

         Securities registered under Section 12(b) of the Exchange Act:

                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                     Common Stock, Par Value $.001 Per Share
                                (Title of class)

Indicate by check mark whether the registrant (I) filed all reports  required to
be filed by Section 13 or 15(d) of the  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes [X] No[ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
any amendment to this Form 10-KSB. [ X ]

Issuer's revenues for its most recent fiscal year were $128,421.

The aggregate market value of the voting stock held by  non-affiliates  computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock, as of April 01, 2002 was approximately $401,534.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of latest practicable date:  128,560,030.

                       DOCUMENTS INCORPORATED BY REFERENCE

There are no documents incorporated by reference.







                              HOUSEHOLD DIRECT INC
                        2001 Form 10-K-SB Annual Report


Table of Contents


Part I                                                                      Page

Item          1.      Description of Business...........................

Item          2.      Properties........................................

Item          3.      Legal Proceedings.................................

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


Part II

Item          5.      Markets and Market Prices.........................

Item          6.      Management's Discussion and Analysis..............

Item          7.      Financial Statements   (See Financial Section)

Item          8.      Changes in and Disagreements with Accountants
                      on Accounting and Financial Disclosure............


Part III

Item          9.      Directors, Executive Officers, Promoters
                      and Control Persons...............................

Item          10.     Remuneration......................................

Item          11.     Security Ownership of Certain Beneficial Owners
                      and Management of HOUSEHOLD DIRECTINC.......

Item          12.     Certain Relationships and Related Transactions....

Item          13.     Exhibits and Reports on Form 8-k..................





                           HOUSEHOLD DIRECT INC.



Item 1. Description of Business.

HouseHold  Direct is a publicly traded holding  company  designed to acquire and
integrate  development stage and operational  companies into a unique marketing,
fulfillment and shopping platform. The mission of HouseHold Direct is to empower
consumers  by creating the largest  private  wholesale  shopping  network in the
world.  The Company is focused on becoming the dominant and only publicly traded
company to represent the presently fragmented industry of independently operated
private buying clubs by  consolidation,  and implementing a national  operations
and franchise program.

RDI Marketing

The Company  was  originally  incorporated  on January 2, 1992 in Florida as RDI
Marketing,  Inc.  ("RDI").  Between 1992 and 1998,  the Company was  essentially
dormant with no significant business activities.

Preferred Consumer Network International, Inc.

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

HouseHold Direct.com, Inc.

On July 12, 1999,  RDI changed its  corporate  domicile from Florida to Delaware
and its name to HouseHold Direct.com,  Inc. by merging into the Company's wholly
owned Delaware subsidiary.

CrossCheck Corp.

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. HouseHold Direct, Inc.

On January 22, 2002 the Company filed a Proxy Statement (Schedule 14-A) with the
Securities and Exchange Commission.  The Notice of Special Meeting and Proxy was
issued only to  stockholders  of record at the close of business on December 21,
2001,  the record date fixed by the Board of  Directors.  The  consensus  of the
Board of Directors was that this action was deemed to be in the best interest of
the Company in order to continue to seek  additional  investment  to support and
implement the Company's business plan.

Therefore the Company's direction was as follows:

         1.   To amend the Articles of Incorporation to change the name from
              HouseHold Direct.com, Inc. to HouseHold Direct, Inc.
         2.   To amend the Articles of Incorporation to increase the number of
              authorized shares of common stock from one hundred million
              (100,000,000) shares - as approved by the shareholders of record
              on July 13, 2001 - to two hundred and fifty million (250,000,000)
              shares.

Company Expansion by Using the Shopping Platform.

The Company has already  launched a national  membership  program  (30-day  Free
Trial)  at $7.95 per month to build a data  bank of  potential  members  for the
larger and more  lucrative  membership  program to be launched from the physical
locations.  Beyond the smaller,  $7.95  program,  we intend to create a $395 and
$795 program, each of which is designed to accommodate higher income consumers.

The Company  expects to provide a "brick and click" shopping  platform,  meaning
that  "members"  will have  access to  physical  customer  service  and  product
purchase  centers  "bricks"  and also use the  Internet  "clicks"  and/or  their
telephone and fax.  These combined  services,  or the shopping  platform,  offer
benefits to Company members, as well as to manufacturers and distributors.

The shopping platform,  when fully operational,  will include physical locations
where members can shop,  using an  Internet/Intranet  based product  cataloguing
systems  to  give  members  access  to  all  of the  information  through  their
computers,  with an integrated  customer  service to answer any questions from a
member.  There are plans to offer a custom designed  in-home delivery system for
larger products, which will be provided by a third party hired for this purpose.
The  special  prices are  available  to  consumers  who are paid  "members",  or
subscribers,  to the  services of the  Company.  The  shopping  platform is also
designed to help support the existing  distributor and  manufacturers'  business
because it can offer improvements to the speed and efficiency of the way they do
business.  In this  way,  the  Company  expects  to get  customers  for both the
business-to-business (B2B) and business-to-consumer (B2C) markets.

The "Members".

The Company  provides  access to these goods and services,  for "members"  only,
directly  from their  homes using any  existing  level of  technology  that they
choose.  These combined  services,  or the shopping  platform,  offer additional
marketing  opportunities  for the Company because it can create  "members" under
its own  HouseHold  Direct brand name and will also allow the Company to support
any type of affinity,  co-branding and partnering capabilities.  This means that
the  Company  can offer its  services  to other  companies  under  their own, or
another brand name.

Instead of using a  merchandise  discounting  method,  that  normally  takes the
suggested  retail price of a product and lowers the price, the Company's plan is
to offer the  wholesale  and  distributor  pricing,  which are the prices that a
normal retail store would pay for the product  before they mark it up to sell to
the consumer. The information about these prices is expected to give members the
knowledge  to either  purchase  goods  through the  Company or to become  better
informed shoppers when they use traditional shopping through retailers.

Consumers  pay an  initial  membership  fee to join the club.  They will also be
charged a recurring fee, like a subscription to a magazine or telephone network.
This  recurring  fee can be paid on either a monthly  or annual  basis.  The fee
allows the "member" to receive direct access to this discounting  system,  which
eliminates  the  traditional  retail  mark-up  on the  purchases  of brand  name
products.

The Building of the Company.

The Company is currently  building a  management  team,  expanding  its Board of
Directors and raising capital. The Company is also concentrating on developing a
plan to build  membership.  The methods  the  Company  intends to employ are: i)
acquisitions;  ii) marketing and selling memberships through the Internet;  iii)
direct  mail  and  telemarketing  solicitation;  and  iv) the  potential  use of
franchising and joint ventures to expand the  geographical  reach of the Company
both domestically and internationally.

Thunderstick, Inc.

On May 14, 1999, RDI entered into an acquisition agreement whereby RDI agreed to
acquire all of the issued and  outstanding  capital  stock of  Thunderstick  LLC
("Thunderstick") in exchange for 1,000,000 shares of common stock.

America's Hometown Brand Center Hometown Brand Center

In November  2000,  the Company  announced  it had entered  into an agreement to
purchase  100% of the  outstanding  shares of  America's  Hometown  Brand Center
Hometown Brand Center, Inc. (AHBC). The agreement called for total cash payments
of  $350,000 in the first 90 days.  $100,000  due at closing  and  $250,000  due
within 90 days.  The closing  should have taken place on or before  December 20,
2000. The Company did not have the cash available to make the initial  payments.
On January 25, 2001 the agreement was terminated.

Megappliance, Inc.

On or  about  September  14,  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 shares of the Company's common stock.

Personal Consumer Services, Inc.

On January 1, 2000,  the  Company  executed a Service  Agreement  with  Personal
Consumer  Services,  Inc.  ("PCS")  whereby  the  Company was engaged to provide
Services  to the PCS  Members  during the term of the  Agreement.  The  services
include (a) taking orders for the purchase of merchandise  and/or services,  (b)
placing   orders  for  the  purchase  of   merchandise   and/or   services  with
manufacturers,  distributors  and/or  providers,  (c)  receiving,  retaining and
paying for the purchase of merchandise and/or services; and, (d) the maintenance
and operation of a customer service  department to deal with Member issues.  The
physical  locations in Atlanta,  Georgia and Birmingham,  Alabama were closed at
year end 2000, and the staff were terminated.


Family Savers Acquisition

The Company  announced on July 9, 2001 that it had entered  into an  acquisition
agreement with Family Savers, Inc. private wholesale buying club, with more than
20,000 active  members  serviced by two locations in South Carolina and Florida,
and a profitable  operating history spanning eight years. The Company planned to
migrate some 4,000  additional  members  retained  from its  agreement  with the
former PCS Club of Atlanta, Georgia and Birmingham,  Alabama, into the sphere of
Family Savers,  thus forming a single centralized  product sales and fulfillment
hub under the corporate banner.

The purchase price was $500,000. The Company advanced $50,000 on the acquisition
but could not forfill its obligation and the acquisition  was terminated.  There
is no legal action pending on the cancellation.


Eqtima, LLC

On December 17, 2001 the Compnay  announced an  acquisition  agreement  had been
signed by the Company to purchase 100% of Eqtima LLC. The initial  consideration
given by the  Company  was  941,830  shares  valued at $6,592.  Certain  working
capital was to be  transfered by the Company to Eqtima that has not been done as
of this date.  Based on the  non-transfer  of working  capital by the Company to
Eqtima the acquisition has been placed on hold pending adequate financing by the
Company.


Company Products

HouseHold  Direct,  Inc.  was  initially  formed to  engage in the  development,
promotion,  marketing and sales of memberships  in a "wholesale  buying club" to
the  public.  The  distinct  benefit  of this  club  membership  is the right to
purchase a broad range of normal household  products at the direct  manufacturer
and/or  distributor price, with no retail type of markup added to the price. The
Company will develop  revenue by charging  membership  fees for the  discounting
service  that it offers.  The fees  charged for the service  are: (1) an initial
membership fee; (2) a monthly or annual dues fee; (3) and, a small commission or
handling  charge for these services.  The Company plans to solicit  consumers to
become  "members"  by  advertising  and  marketing  its'  services  directly  to
consumers.

The Company plans to expand its  operations  by developing  and promoting new or
complementary  services,  products or  transaction  formats and by expanding the
breadth and dept of the services the Company provides.

The  Company's  success  depends in part on its ability to purchase  products in
sufficient quantities at competitive prices. 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.  Also,  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.

Sales and Marketing

The  growth  plans  are  substantially  based  on  acquisitions.  A  significant
component  of  the  future   growth   strategy  is  to  continue  to  make  such
acquisitions.  The Company will be continually  evaluating possible acquisitions
of businesses or product lines that  complement or expand the existing  business
or product lines, and management  intends to pursue  favorable  opportunities as
they arise.

The Company's business depends in large part on continued growth in, and the use
of, the Internet. There are critical issues concerning the commercial use of the
Internet which remain  unresolved.  The issues  concerning the commercial use of
the  Internet  which we expect to affect the  development  of the market for our
products and services include:

     . security                . ease of access
     . reliability             . quality of service
     . cost                    . necessary increases in bandwidth availability

The adoption of the Internet for  information  retrieval and exchange,  commerce
and  communications,  particularly by those  enterprises that have  historically
relied upon  traditional  means of commerce and  communications,  generally will
require that these enterprises  accept a new medium for conducting  business and
exchanging  information.  These entities likely will accept this new medium only
if the Internet provides them with greater  efficiency and an improved arena for
commerce and communication.

Our success, in particular our ability to receive and fulfill orders and provide
high-quality   customer   service,   largely   depends  on  the   efficient  and
uninterrupted  operation of our computer and communications systems. We contract
with a third party to host and maintain our Web sites.  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.

Competition

The Company  competes with various  companies that are both public and privately
owned. They come from three separate categories: (1) other private buying clubs;
(2) public wholesale discount clubs; and (3) a variety of Internet sellers. Some
of the privately owned buying clubs are: (1) United Consumers Club with about 90
locations;  (2) Unimart,  which has 2 locations;  and finally, (3) Uniway, which
has both company owned and  franchised  locations  totaling 14 locations.  These
clubs  normally  charge an initial fee of $800 to $1,500 and annual renewal fees
of about $50 to $100.  It is from this existing  group of membership  clubs that
the Company will seek to locate potential acquisition candidates.

The publicly owned discount clubs include Costco  Wholesale  Corporation,  Sam's
Club  (Wal-Mart  Stores,  Inc.),  and  BJ's  Wholesale  Club.  Typically,  these
companies charge an initial and annual  membership fee of $25 to $75.  According
to  documents  filed with the SEC,  their  combined  sales  exceed  $64  billion
annually.

Internet  sellers  can  be  auction  sites,  Web  sites  owned  directly  by the
manufacturer  or other  resellers  of household  products.  Some of our business
expansion  plans  assume that we will be involved in marketing  memberships  and
products over the Internet,  where our markets are highly competitive and we may
be unable to compete effectively.

The e-commerce  marketplace is new, rapidly evolving and intensely  competitive.
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.  The general  household  product
industries are also intensely competitive.  In the general and household product
industries  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.

A key  element of our  strategy  is to generate a high volume of traffic on, and
use of, the Web sites. Accordingly,  Web site transaction processing systems and
network infrastructure performance, reliability and availability are critical to
our operating results. These factors are also critical to our reputation and our
ability to attract and retain customers and maintain  adequate  customer service
levels.

The  Internet  and  the   e-commerce   industry  are   characterized   by  rapid
technological change, changes in user and customer requirements and preferences,
and  frequent  product  and  service  introductions.  If  competitors  introduce
products and services  embodying new  technologies or if new industry  standards
and practices  emerge,  then our existing Web site,  proprietary  technology and
systems may become obsolete. Our future success will depend on our ability to do
the following:

o    license  and/or  internally  develop  leading  technologies  useful  in our
     business;

o    enhance our existing services;

o    develop  new  services  and  technology   that  address  the   increasingly
     sophisticated  and varied needs of our existing and prospective  customers;
     and

o    respond to  technological  advances and  emerging  industry  standards  and
     practices on a cost-effective and timely basis.

The  development  of our Web  site  and  other  proprietary  technology  entails
significant technical and business risks.

Our Web site competes with both e-commerce and traditional  shopping methods for
general  household  products.  Due to  this  competition,  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,  product
availability, credit security, confidentiality, and customer service.



Regulation

The law relating to the liability of online  services  companies for information
carried on or disseminated through their services is currently unsettled.  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.  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.  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.  In addition,  the increase  attention  focused upon
liability  issues as a result of these lawsuits and legislative  proposals could
impact  the  growth of  Internet  use.  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.


Patents and Trademarks


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.


Research and Development

The  approximate  amount  expended by the Company on research and development of
its  products  during the years 2001 and 2000,  totaled $ 19,786  and $ 606,596
respectively.  The  Company  has not  incurred  any  direct  costs  relating  to
environmental regulations or requirements.

Employees

The  Company  will be  dependent  upon the  personal  efforts and ability of the
President,  Secretary,  and  Directors.  Presently  the  Company  has a total of
2 executive employees.

Item 2.   Properties.


The  Company's  executive  offices  are located at 3 Glen Road,  Sandy Hook,  CT
06482.  The Company has a one year lease which expires in June 2002. The Company
pays a base monthly rental of $850.

Item 3.   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.com,  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.


There are no material legal proceedings pending against the Company.

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

A Special Meeting of stockholders' held on July 28, 2001 in Alpharetta, Georgia.

The stockholders approved the following:

1.   To amend the Articles of Incorporation to increase the number of authorized
     shares  of common  stock  from  fifty  million  (50,000,000)  shares to one
     hundred million (100,000,000) shares.

On January 22, 2002 the Company filed a Proxy Statement (Schedule 14-A) with the
Securities and Exchange Commission.  The Notice of Special Meeting and Proxy was
issued only to  stockholders  of record at the close of business on December 21,
2001,  the record date fixed by the Board of  Directors.  The  consensus  of the
Board of Directors was that this action was deemed to be in the best interest of
the Company in order to continue to seek  additional  investment  to support and
implement the Company's business plan.

Therefore the Company's direction was as follows:

1.   To amend the Articles of  Incorporation  to change the name from  HouseHold
     Direct.com, Inc. to HouseHold Direct, Inc.

2.   To amend the Articles of Incorporation to increase the number of authorized
     shares of common stock from one hundred million (100,000,000) shares to two
     hundred and fifty million (250,000,000) shares.



PART II


Item 5.

Markets and Market Prices

The  principal  United  States market in which our common stock is traded is the
over-the-counter market electronic Bulletin Board. The following table shows the
range of reported low bid and high bid per share quotations for our common stock
for the periods indicated. The high and low bid prices for the periods indicated
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

                                  Low Bid         High Bid
2001
     First Quarter ................0.005            0.035
     Second Quarter............... 0.010            0.060
     Third Quarter................ 0.030            0.080
     Fourth Quarter............... 0.047            0.109

2000
     First Quarter................ 0.625            1.875
     Second Quarter............... 0.313            1.156
     Third Quarter................ 0.260            0.520
     Fourth Quarter............... 0.060    ....    0.090

Dividends

The  Company  has never paid cash  dividends  on its  common  stock and does not
anticipate  paying any cash dividends in the foreseeable  future.  It intends to
retain its earnings to finance the  expansion of its business and for  corporate
purpose.  Any payment of dividends  will be at the  discretion  of the Company's
Board of  Directors  and will depend upon the  earnings,  financial  conditions,
capital  requirements,  level of  indebtedness,  contractual  restrictions  with
respect to payment of dividends and other factors.




Item 6. Management's Discussion and Analysis.


OVERVIEW

HouseHold  Direct  is a  publicly  traded  holding  company  that  is  acquiring
specialized  business  operations  to  support  the  launch of a large  national
membership  services  platform.  This  platform  will  include  several  hundred
physical  locations in key markets  around the country and will be combined with
an Internet/Intranet  web presence to offer a unique wholesale offering of brand
name consumer goods to a large segment of the consumer population.

The strategy of the Company is to consolidate multiple business units, which, in
addition to adding current revenues and earnings, will offer synergy, market and
opportunity leverage at reduced operating expenses, thereby developing increased
shareholder value.

The Company is  developing  key  expertise in  franchising,  merger/acquisition,
business  integration and expedited ROI strategies.  The management team and its
advisors  include  several  experts  in  their  respective   fields  that  boast
substantial track records for successful performance.

HouseHold Direct has expanded the types and categories of companies targeted for
acquisition.  These  negotiations  are being  supported and  coordinated  by the
merger and  acquisition  team at  Southbridge  Business  Resources  (SBRI).  The
expanded plan  proposed by SBRI is to acquire  separate,  profitable  operations
that  represent  the  various   components  of  the  national  HouseHold  Direct
membership marketing and fulfillment platform,  instead of initially approaching
the wholesale shopping clubs. These expanded business categories include: e-mail
or direct mail marketing  services,  customer  support or service  bureaus,  and
product  shipping and delivery  carriers.  Approaches are also being directed to
consumer product sales companies including:  catalog, some types of retail and a
broad group of wholesale  companies that will gain vertical  market  integration
with many different manufacturers.

The  Company's  previous  consolidation  plan was limited to existing  wholesale
buying club operations as a method to rapidly gain revenue and market share. The
strategy has been sound, but the number of companies  suitable for consideration
has been limited. The larger club operators,  which are profitable,  want to see
revenues and earning in a potential acquirer,  and this program can provide that
immediate advantage.

By  implementing  a  business  development  strategy  that  allows for the rapid
acquisition  of multiple  components of the national  platform,  it will be much
easier  to  create  an  organization  with  substantial  revenues  that can then
implement the buying club  consolidation  plan.  The immediate  result from this
strategic  shift is that the number of target  companies has expanded from fewer
than ten to more than 100.

The Company's outlook for success is optomistic, especially given current market
conditions.  The reduced market  environment,  curtailing of investment  banking
activities  and  wholesale  disappearance  of  venture  capital  to the  general
landscape  indicate that many small  companies will continue to seek an alliance
or  acquisition  by an existing  public company that can meet the needs of these
growing enterprises.


RESULTS OF OPERATIONS


Revenues

Twelve  Months  Ended  December  31, 2001  Compared to The Twelve  Months  Ended
December 31, 2000


The Company has been in its developmental stage since May 18, 1998. Net Revenues
for the twelve months ended December 31, 2001 were $128,421  comprising  sale of
merchandise of $47,546 (37%), and consulting services of $80,875 (63%). Revenues
for the twelve  months ended  December 31, 2000 were  $174,300  from  consulting
services, $235,357 from sales and $35,900 from member.


From Inception May 18, 1988 to December 31, 2001

Company  revenues earned since inception were $628,399.  Revenues from sale were
$283,903 or 45% of the total  revenues  from  inception.  Consulting  income was
$255,175,718  which  is  49%  of the  total  revenues,  over  the  same  period.
Membership fees, all earned in the year 2000, were only 6% of the revenues.



Operating  Expenses

Twelve  Months  Ended  December  31, 2001  Compared to The Twelve  Months  Ended
December 31, 2000

Total  Operating  Expenses  other than Cost of Sales for the twelve months ended
December 31, 2001 were  $2,036,577  compared with $4,128,985 for the same period
in 2000, an increase of 51%.  Cost of  merchandise,  $24,419,  was 91% of sales
revenues in the year 2001.

Salaries and related costs  decreased  from $665,624 for the twelve months ended
December 31, 2000 to $248,595 for the twelve  months ended  December 31, 2001; a
63%  decrease. At the year end the Company, only had two executive employees.

Consulting fees remained  approximately  the same for 2000 and 2001.  Consulting
fees  were  expended  mostly  for  developing  a  marketing  plan and  financial
consulting.

Research and development  costs are primarily to develop the Company's Web site.
In 2001,  development  costs were $134,037 as compared with $606,596 in the year
2000, an decrease of $472,559 or 78%.  Most of research and  development  costs
involve payments to consultants for their services.

General and  Administrative  expenses  decreased from  $1,560,853 for the twelve
months  ended  December  31, 2000 to $396,409  for the same period in 2001.  The
decrease of 75% is primarily due to the Companys  requirement for addition funds
to continue operations.

From Inception May 18, 1988 to December 31, 2001

Since   inception,   the  Company  has  expended   $3,232,773  for  general  and
administrative  activities.  The general and administrative expenses account for
37% of total operating expenses, since inception. Other operating expenses were:
consulting expenses,  $3,175,683 (36%), salaries and benefits, $1,364,675 (15%),
research and  development  $871,705 (10%),  and  Depreciation  and  amortization
$117,480 (1%), from inception to December 31, 2001.


Liquidity and Future Plans

The Company  working  capital  deficit of $2,686,059 and negative cash flow form
operations  for the  year  ended  December  31,  2001 of  $472,362  put HHD in a
precarious  position.  To extricate itself from these problems.  We had signed a
definitive  financing  contract  for a $10 million  equity  credit line 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 large  equity
package,  which is related to the Company  filing an amended  SB-2  Registration
Statement which was originally filed in July 2001.


Cash used by investing  activities for the twelve months ended December 31, 2000
were principally  related to the investment in software $36,750 and the addition
of computer and office  equipment  in the amount of $98,120.  For the year ended
December 31, 2001, cash used in investing activities was $50,000,  primarily for
the cancelled  acquisition of Family Savers.  Also in 2001 the Company wrote off
purchased software of $36,750 and equipment of $86,914.

The  Company   anticipates  that  the  current  working  capital  deficiency  of
$2,686,059 will be  supplemented  in the short term by the sale of common stock
and short term borrowing.


From Inception May 18, 1988 to December 31, 2001

The net cash outflow from  operations  was  $2,677,495,  over the period May 18,
1998  to  December  31,  2001.  Primarily,  through  issuance  of  common  stock
$(2,699,041),  the Company  obtained the funds  needed to pay for the  operating
cash deficiency and the investment of $133,277 in property, equipment, and other
assets. The use of debt was limited to $93,000 of advances on notes payable.

The net  loss  from  inception  of the  Company  was  $8,283,414.  The  loss was
essentially  financed through  issuance of $2,699,041  common stock for cash and
$3,020,856  for services.  The issuance of common stock  provided 69% of the net
loss  amount.  Essentially,  the  accounts  payable of  $1,648,599  and  accrued
salaries  of $652,356  provided  the  additional  28% 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  December  30,  2001,  we  had  an  accumulated   deficit  of
$8,283,414.  We expect that our deficit will continue to increase.  The revenues
were  insignificant  amounts  and 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 two 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. 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.


The Voting Control Held by Present  Management  Could  Significantly  Impact Our
Business.

As of December 31, 2001,  our current  officers and directors  beneficially  own
8,191,539  shares of our common  stock,  or  approximately  10% of the shares of
common stock deemed  outstanding on such date for the purposes of the percentage
calculation,  not including certain shares underlying options held by Mr. Folger
and Ms. Jameson.  As there are no cumulative voting rights,  current management,
by virtue of their stock ownership,  can be expected to influence  substantially
the  election  of  our  Board  of  Directors  and  thereby  continue  to  impact
substantially our business, affairs and policies.


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.

The  Company's  future  results  of  operaitons  and the  other  forward-looking
statements  contained here in particular the statements  reparding growth in the
membership buying group industry,  capital  spending,  research and development,
and marketing and general and administrative expenses, involve a number of risks
and  uncertainties.  In addition to the factors discussed above, among the other
factors that could cause actual results to differ  materially are the following:
business  conditions and the general economy;  competitive factors such as rival
manufacturers' availability of products at reasonable prices; risk of nonpayment
of accounts receivable; risks associated with foreign operations, and litigation
involving intellectual properly and consumer issues.

The  managemnt of HOUSEHOLD  DIRECT INC.  believes that it will have the product
mix, facili , personal,  and  competitive  and financial  resources for business
success, but revenues,  costs,  margins,  product mix and pro are subject to the
influence of a number of factors, as discussed above.



Item 7.   Financial Statements.
(See Attached)


Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
Financial Disclosure


Current Dispute with Prior Years Accountants

Presently,  the  Company  is  having  a fee  payment  dispute  with  its  former
independent  certified public  accountants,  McGladrey & Pullen,  LLP,  formerly
known as  WallaceSanders  & Company,  who issued their  report on the  Company's
consolidated balance sheets and related  consolidated  statements of operations,
changes in shareholders  deficit, and cash flows for the year ended December 31,
1999 and for the period from May 18, 1998  (inception) to December 31, 1999. Due
to this dispute, McGladry & Pullen will not issue their consent to include their
opinion letter in the current year's annual report for 10K-SB.

Their  updated  opinion on the audit they  performed for the years 1998 and 1999
contained a paragraph  explaining  that due to the  Company's  net losses  since
inception and its severe liquidity  problems,  there is substantial  doubt about
the Company's ability to continue as a going concern. McGladry & Pullen's Report
of Independent  Certified Public Accountants appeared in the Form 8-K/A filed on
or about  June 28,  2000.  The  Company is not aware of any  subsequent  events,
transactions or other matters that may effect the previous  report.  The Company
states  that  there can be no  assurance  that the  predecessor  auditors  would
reissue the report in its original form without qualification if the fee dispute
were resolved.


Article III


Item 9.   Directors, Executive Officers, Promoters and Control Persons

The Company's Executive Officers and directors are as follows:


John D. Folger,  President and Chief Executive  Officer,  and Director,  age 50.
Since  February  of 1997 as  President,  CEO and  Chairman of the  Company,  has
organized a unique national  membership program into a publicly held enterprise.
He has developed operational plans, business structures and mandates and has led
the  Company  from  concept,   through   development  and  currently   launching
operational  phase.  Mr.  Folger  has over 25  years  experience  in  conceptual
marketing  structure as direct  employee,  consultant,  and principal.  He has a
diverse executive management background with substantial credits in the creation
and implementation of market expansion  strategies for public and privately held
companies.  During  this  period he has:  1) created a master and  sub-franchise
system for Business Exchange  International;  2) developed marketing plans for a
wholly  owned  subsidiary  of   Bristol-Myers/Drackett   and  Business  Exchange
International;  3) developed  financing  programs for Finlandia  Industries;  4)
developed  multiple  office  recruiting  and  operating   strategies  for  Amour
Funding/The  Investor  Group;  and,  5)  designed,  in  conjunction  with Online
Business  Associates,  The Virtual Visitor Center  Internet-based  applications.
From January 1, 1992 through May of 1993, Mr. Folger served as Vice President of
Finlandia Industries; from June of 1993 through December of 1994 as President of
MBA  Financial  Corp;  from  January  of 1995  through  January  of 1997 as Vice
President of Online Business Associates, Inc.

Ann D. Jameson,  Vice  President,  Secretary/Treasurer,  and  Director,  age 58.
Jameson's 28 years of experience  includes positions with The Hartford Insurance
Group and Carvel  Corporation.  She has  developed  managerial  expertise in key
areas of strategy  assessment,  policy  development,  and project methods,  data
processing  systems  development  projects,   procedures  and  training,   human
resources and corporate  relations.  She developed  programs and strategies that
addressed employee  involvement,  innovation and community service as Manager of
Community Affairs and Employee Services.

Prior to her association  with the Company,  Jameson's focus was directed toward
the  development  and support of  programs  and  strategies  to a client base of
corporate/small    business    levels,    healthcare,     professional/community
organizations, service/recreational agencies, and tourism as Executive Assistant
with Laughter Works Seminars, Fair Oaks, CA. Her professional activities include
director  positions  with the National  and  Connecticut  Employee  Services and
Recreational Associations,  as well as special events including New York Medical
College, "This Close" for Cancer Research, and the Michael Bolton Foundation.

Both Mr. Folger, and Ms. Jameson are currently involved in the completion of the
winding up of Preferred  Consumer Network  International,  Inc.  ("PCNI").  PCNI
entered into an operating  agreement with United Buyers Service of Massachusetts
and Connecticut (entities owned by Mr. Folger), which was engaged in the sale of
memberships  in and the  operation of a consumer  wholesale  buyers  club.  As a
result of the failure of these businesses,  certain  withholding taxes were left
unpaid.  The Internal  Revenue Service ("IRS") has instituted  collection of the
payroll  taxes and placed liens on certain real  property of Mr.  Folger and Ms.
Jameson.  Both  parties  are  currently  attempting  to obtain  and  complete  a
settlement of the IRS claims.


Item 10. Executive Compensation.

The  following  table sets  forth the  compensation  paid to  certain  executive
officers of the registrant for the three years ended December 31, 2001:

                           Summary Compensation Table




Name and                                                            Other
Principal                                         (a)               Annual
Position             Year         Salary         Bonus          Compensation
---------            ----         ------         -----          -------------


John Folger
President, CEO       2001        $75,000        20,640(4)         5,316(3)
and Director         2000         75,000           --             9,932(1)
                     1999         75,000           --             4,226

Ann Jameson
Vice President       2001        $75,000        19,733(4)         6,852(2)
Secretary-           2000         75,000           --             4,250(2)
Treasurer            1999         75,000           --             4,250
and Director



                                           Awards                  Payouts
                                -----------------------            -------
Name and                        Restricted
Principal                          Stock       Options/              LTIP
Position             Year        Awards(#)      SARS(#)            Payouts
---------            ----       ----------     --------            -------


John Folger
President, CEO       2001           --              --                --
and Director         2000           --              --                --
                     1999           --         870,000                --
Ann Jameson
Vice President
Secretary-           2001           --              --                --
Treasurer            2000           --              --                --
and Director         1999           --         750,000                --




(1)  Includes Auto Allowance and Medical Insurance

(2)  Includes Auto Allowance Only

(3)  Includes Health Insurance Only

(4)  The bonus  represents  the value of shares  that were  given as part of the
     2001 employee incentive stock option plan.

Directors are not paid or reimbursed for attending meetings.

There were no options granted to employees during the year 2001.


Item 11.  Security  Ownership of Certain  Beneficial  Owners and  Management  of
Household Direct. Com, Inc.

The following table sets forth certain information as of December 31, 2001, with
respect to the beneficial ownership of the Company's common stock by all persons
known  by the  Company  to be the  beneficial  owners  of  more  than  5% of its
outstanding  shares,  by directors  who own common stock and by all officers and
directors as a group.



Names and Address of           Title of     Amount and Nature of      Percent of
  Beneficial Owner               Class      Beneficial Ownership         Class
--------------------           --------    ----------------------     ----------


John D. Folger, President       Common          7,140,111(1)
CEO, Director, Chairman
3 Glen Road
Sandy Hook, CT 06482

Ann D. Jameson, Vice-President  Common          2,671,428(2)
Secretary, Treasurer, Director
3 Glen Road
Sandy Hook, CT 06482



Officers and Directors          Common          9,811,539(3)
As a class 2 persons


(1)  Included  in the  shares are  options to  purchase  870,000  common  shares
     granted in November 1999

(2)  Included  in the  shares are  options to  purchase  750,000  common  shares
     granted in November 1999


(3)  Included in the  calculation  of percent of class are 1,620,000 options to
     purchase shares at various prices


Item 12.   Certain Relationships and Related Transactions


Directors,  Officers  and  Shareholders  of the  Company,  John  Folger  and Ann
Jameson,   have  entered  into  various  transactions  with  the  Company  since
inception.  In the years 1999 through 2001,  they deposited cash of $974,682 and
withdrew cash of $572,763. They loaned their personal shares of the Company that
were used to pay vendors  valued at $275,235.  They also loaned their shares for
the acquisition of Thunderstick and Megappliance valued at $39,720.

As of December 31, 1998, John Folger wholly owned PCNI. During 1999, the Company
made payments  totaling  $190,622 on behalf of PCNI. It was determined that this
amount would not be collected by the Company and  therefore  written off against
the  amounts  payable to Mr.  Folger.  In year 200,  John Folger and Ann Jameson
received 2,857,142 common shares of the Company valued at $162,125 in payment of
a significant  portion of their loan. In 2001 they received  8,736,020 shares as
compensation  valued at  $106,155.  The balance of the loan due them on December
31, 2001 was $317,918.


Item 13.   Exhibits and Reports on Form 8-K


Def 14-A - Definitive Proxy Statement - filed 01/03/02
Form 8-K/A - Eqtima, LLC - filed 01/10/02
Form 8-K/A - Eqtima, LLC - filed 03/25/02




SIGNATURES

Pursuant  to the  requirements  of the  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized,  in the  City of
Southbury, State of Connecticut, on April 16, 2002.


                              HOUSEHOLD DIRECT INC.



                           By:            s/ John D. Folger
                           ----------------------------------------
                           John D. Folger
                           President
                           Chief Executive Office
                           (Principal Executive Officer)


                                          s/ Ann D. Jameson
                            ----------------------------------
                            Ann D. Jameson
                            Chief Financial Officer
                            (Principal Financial and Accounting Officer)


Pursuant to the  requirements  of the Securities and Exchange Act of 1933,  this
report has been signed by the following  persons on behalf of the  Registrant in
the capacities and on the dates indicated.




s/ John D. Folger         April 16, 2002
----------------------------------------
John D. Folger                  Date



s/ Ann D. Jameson        April 16, 2002
----------------------------------------
Ann D. Jameson                    Date




PART II

ITEM 7.  FINANCIAL STATEMENT


                              HOUSEHOLD DIRECT INC.
                          INDEX TO FINANCIAL STATEMENTS


Table of Contents                                                   Page



Consolidated Balance Sheet at December 31, 2001                      F-1


Consolidated Statements of Operations for the
 years ended December 31, 2001 and 2000 and from
Inception to December 31, 2001                                       F-3

Consolidated Statements of Shareholders' Equity
 for the years ended December 31, 2001 and 2000 and from             F-5
Inception to December 31, 2001

Consolidated Statements of Cash Flows for the
 years ended December 31, 2001 and 2000 and from
Inception to December 31, 2001                                       F-7


Notes to Consolidated Financial Statements                           F-9







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



                                     Assets




Current assets:
     Cash and cash equivalents                                       $  1,245
     Prepaid expenses and other current assets                          4,600
                                                                      -------

         Total current assets                                           5,845

Property and equipment, net                                            40,542

Intangible assets, net                                                 15,748
Other assets - contracts receivable                                    58,500
Deposits as security                                                    7,759
                                                                      -------

         Total assets                                               $ 128,388
                                                                      =======




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







                              HOUSEHOLD DIRECT INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                                DECEMBER 31, 2001
                                   (CONTINUED)



                      Liabilities and Shareholders' Deficit



Current liabilities:
     Accounts payable                                              $ 1,648,599
     Accrued salaries                                                  652,356
     Current portion of note payable                                    73,031
     Amounts payable to related parties                                317,918
                                                                    ----------

         Total current liabilities                                   2,691,904


Commitments and contingencies

Shareholders' deficit:
Common stock, 100,000,000 shares of $0.001 par value
      authorized; 84,300,059, Shares issued and
      outstanding at December 31, 2001                                  84,299
     Additional paid-in capital                                      5,635,599
     Deficit accumulated during the development stage               (8,283,414)
                                                                     ---------

         Total Shareholders' deficit                                (2,563,516)
                                                                     ---------

         Total liabilities and shareholders' deficit             $     128,388
                                                                    ==========


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



                     HOUSEHOLD DIRECT INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS



                                          For Year Ended         May 18, 1998
                                            December 31,        (Inception) to
                                        -------------------
                                        2001           2000    December 31, 2001
                                        ----           ----    -----------------
 Revenues:
   Consulting services               $ 80,875    $  174,300          $ 308,593
   Membership Fees                         --        35,903             35,903
   Sales                               47,546       236,357            283,903
                                    ---------     ---------          ---------

Total revenues                        128,421       446,560            628,399
Cost of sales                          24,419       214,322            238,741
                                    ---------     ---------          ---------

Gross profit                          104,002       232,238            389,658

Operating expenses:
   Salaries and benefits              248,595       665,624          1,364,675
   Research and development           134,037       606,596            871,705
   Depreciation and amortization       25,275        69,159            117,480
   Consulting fees                  1,232,261     1,226,753          3,175,683
   General and administrative         396,409     1,560,853          3,232,773
                                    ---------     ---------          ---------

   Total operating expenses         2,036,577     4,128,985         (8,762,316)
                                    ---------     ---------          ---------

Loss from operations               (1,932,575)   (3,896,747)        (8,372,658)
                                    ---------     ---------          ---------

Other expense:
   Interest expense                    26,987           964             28,828
   Write down of assets               156,269            --            156,269
   Loss on subsidiary                      --            --            319,737
                                    ---------      ---------          ---------

   Total other expense              (183,256)          (964)          (504,835)
                                    ---------      ---------          ---------

Net income before income tax
  and extraordinary item          (2,115,831)    (3,897,711)        (8,877,493)
Extraordinary item
Forgiveness of debt                  594,079             --            594,079
                                   ---------      ---------          ---------
   Loss for period                (1,521,752)    (3,897,711)        (8,283,414)

Provision for income                      --             --                 --
   Tax                                    --             --                 --
                                   ---------      ---------          ---------
Net loss for period             $ (1,521,752)  $ (3,897,711)      $ (8,283,414)
                                   =========      =========          =========

Net loss per weighted average
 share of common stock outstanding    $ (.03)        $ (.16)            $ (.03)
                                         ===            ===                ===

Weighted average number of shares
  of common stock outstanding     52,014,000     24,409,500         29,116,491
                                  ==========     ==========         ==========

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






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



                                            For Year Ended        May 18, 1998
                                             December 31,        (Inception) to
                                        --------------------   -----------------
                                           2001         2000   December 31, 2001
                                           ----         ----
December 31, 2000

Cash flows from operating activities
 Net loss                             $(1,521,753)  $(3,897,711)    $(8,283,414
 Adjustments to reconcile net loss
   to net cash used in
  operating activities:
   Depreciation                           (13,467)       57,760          65,259
   Goodwill Amortization                  ( 3,911)       11,399           9,568
   Services in exchange for
      stock and options                   655,641     2,013,506       3,273,890
   Interest paid with stock                    --            --          20,500
   (Increases) decreases in
     operating assets:
   Accounts receivable                         --       (58,500)        (63,100
   Prepaid expenses and other
     current assets                            --         9,565              --
   Deferred Compensation                       --        15,000              --
   Inventory                               64,056       (64,056)             --
   Increases (decreases) in
     operating liabilities:
   Accounts payable                       196,826       780,432       1,648,599
   Amounts payable to related parties      52,213    (   84,277)        160,043
   Deferred revenue                    (   54,000)       54,000              --
   Accrued Salaries                       152,033    (   60,873)        491,160
                                       ----------      --------      ----------

    Net cash used in operating
      activities                       (  472,362)   (1,223,755)     (2,677,495)
                                        ---------     ---------       ---------

Cash flows from investing activities:
   Cash acquired from acquisition
     of Thunderstick investment
      in Megappliance                          --            --      (   18,720)
   Purchase of software                    36,750    (   36,750)             --
   Additions to property and equipment     86,914    (   98,120)     (  105,801)
   Deposits as security                (      192)   (    7,564)     (    7,756)
                                        ---------     ---------       ---------

    Net cash used in investing
     activities                           123,472    (  142,434)     (  132,277)
                                        ---------     ---------       ---------

Cash flows from financing activities:
   Stock issued for cash                  308,207     1,311,694       2,699,041
   Cash received on stock
     subscriptions receivable                  --            --          38,945
   Advances on notes payable               50,000        32,000          93,000
   Payments on notes payable           (    8,072)   (    8,518)     (   19,969)
                                        ---------     ---------       ---------

 Net cash provided by
    financing activities                  350,135     1,335,176       2,811,017
                                        ---------     ---------       ---------





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




                                       For Year Ended            May 18, 1998
                                         December 31,           (Inception) to
                                       --------------          -----------------
                                        2001       2000       December 31, 2001
                                        ----       ----       -----------------
December 31, 2000

Net increase (decrease) in cash      $ 1,245   $ (31,013)            $  1,245

Cash, beginning of period                 --      31,013                   --
                                      ------      ------               ------

Cash and cash equivalents,
    end of period                    $ 1,245         --              $  1,245
                                      ======   $  ======               ======


SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION

     Cash paid during the
       period for interest           $ 1,112    $   964              $ 3,606
                                       =====       ====                =====

     Cash paid during the
       period for income taxes            --         --                   --
                                        ====       ====                =====


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


SUPPLEMENTAL INFORMATION

The Company had the following non-cash transactions since inception:

1998

1. The Company issued 10,000,000 shares for the acquisition of PCNI for $10,000.

2. The Company issued 914,000 shares valued at $100,540 for services.

3. The Company issued 175,905  shares in lieu of $20,500  interest  payable on a
note payable.

4. The Company received subscriptions for 200,000 shares for $50,000.









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


1999

1.   The Company issued 1,488,800 shares for services valued at $369,372.

2.   The Company received subscriptions for 50,000 shares valued at $23,000.

3.   The Company  borrowed  624,000 shares of common stock from  stockholders in
     order to consummate  the  Thunderstick  and  Megappliance  acquisition  and
     reclassified $9,999 payables to related parties as paid-in capital.

4.   The Company issued 2,445,000 options for services valued at $125,131.


2000

1.   The  Company  issued  100,000  shares  to  acquire a public  company  shell
     (CrossCheck) valued at $34,642.

2.   The  Company  issued  124,000  shares to pay related  parties  loans in the
     amount of $39,720.

3.   The Company  issued  2,924,286  shares to pay accrued  salaries and bonuses
     valued at  $166,504.  Of these  shares,  1,785,714,  which  were  valued at
     $101,328, were issued to two shareholder-officers of the Company.

4.   The  Company  issued  2,922,435  shares  valued at  $660,892  for  investor
     relations and professional services.

5.   The Company issued  2,857,142 shares valued at $162,125 to repay loans made
     to the Company by officer-shareholders.

6.   The Company issued  356,095  shares valued at $151,285 to  consultants  for
     research and development of the Company's Web site.

7.   The Company issued  624,000 shares to pay back shares related  parties lent
     to the Company so the Company could purchase Thunderstick,  500,000 shares,
     and Megappliance,  124,000 shares. Furthermore,  the Company issued 500,000
     shares in connection with the acquisition of Thunderstick

8.   The Company  issued  1,000,000  shares in exchange  for $50,000 in cash and
     consulting services valued at $474,266.



2001

1.   The  Company  issued  34,992,956  common  shares:   consulting  services  -
     financial  valued at  $428,796,  maintenance  of  software  and  operations
     $80,151: officers bonus, $40,373: legal fees $34,100: salaries $65,782. The
     total value of the shares issued was $649,202.

2.   The Company  issued 941,830 common shares as part of the purchase of Eqtima
     LLC valued at $6,593.





                     HOUSEHOLD DIRECT INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT



                               Common Stock          Additional        Stock
                               ------------          Paid-in      Subscriptions
                           Shares     Par Value      Capital         Receivable
                           ------     ---------      --------      ------------
1998

Reinstatement and
 Recapitalization,
May 18, 1998              1,000,000       1,000     $      --           $    --
Stock issued for
cash                      1,627,095       1,627        174,334               --
Stock issued for
  Services                  914,000         914         99,626               --
Stock issued for
  Purchase of PCNI       10,000,000      10,000             --          (10,000)
Sale of PCNI                     --          --             --                1
Stock issued in lieu
  of interest               175,905         176         20,324               --
Stock issued for
  Subscriptions
  receivable                200,000         200         49,800          (50,000)
Net loss                         --          --             --               --
                         ----------     -------      ---------          -------

Balance, December
   31, 1998              13,917,000      13,917        344,084          (59,999)

1999
----
Stock issued for cash     4,784,504       4,785        897,394               --
Stock issued for
  services                1,488,800       1,489        367,883               --
Stock issued for
  subscriptions
  receivable                 50,000          50         22,950          (23,000)
Cash received on
  stock subscriptions
  receivable                     --          --             --           38,645
Reclassify related
  party payable                  --          --             --            9,999
Options granted for
 services                        --          --             --               --
Deferred
Compensation
Net Loss                         --          --             --               --


Balance, December
   31, 1999              20,240,304     $20,241      $1,632,311       $ (34,355)


The accompanying notes are an integral part of the financial statements.



                     HOUSEHOLD DIRECT INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT



                                                           Deficit
                                                           During       Total
                            Options        Deferred    Development  shareholder
                          Outstanding    Compensation     Stage        Deficit
                          -----------    ------------  -----------  -----------

1998

Reinstatement and
 Recapitalization,         $     --                     $    --      $    1,000
May 18, 1998
Stock issued for                 --                          --         175,961
cash
Stock issued for                 --                          --         100,540
  Services
Stock issued for                 --                          --              --
  Purchase of PCNI               --                          --               1
Sale of PCNI
Stock issued in lieu             --                          --          20,500
  of interest
Stock issued for
  Subscriptions                  --                          --              --
  receivable                     --                    (638,684)       (638,684)
Net loss                    -------        --------     -------        --------


Balance, December                --                    (638,684)       (340,682)
   31, 1998

1999
----                             --                          --         902,179
Stock issued for cash
Stock issued for                 --                          --         369,372
  services
Stock issued for
  subscriptions                  --                          --              --
  receivable
Cash received on
  stock subscriptions            --                          --          38,645
  receivable
Reclassify related               --                          --           9,999
  party payable
Options granted for         125,131                          --         125,131
 services
Deferred                                  15,000                         15,000
Compensation                    --           --       (2,225,266)    (2,225,266)
Net Loss                  --------      --------      -----------    ----------


Balance, December         $125,131      $ 15,000    $ (2,863,950)    (1,105,622)
   31, 1999


The accompanying notes are an integral part of the financial statements.




                     HOUSEHOLD DIRECT INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT
                                   (CONTINUED)





                                Common Stock          Additional      Stock
                                ------------            Paid-in    Subscription
                             Shares     Par Value       Capital      Receivable
                             -------    ---------      --------    -------------
2000

Stock issued for cash,
  rights offering            408,359         408         122,099             --
Stock issued for cash      2,212,655       2,213       1,136,974             --
Stock issued for cash
   and services            1,000,000       1,000         523,266             --
Stock issued for
 Services:
   Salaries                2,924,286       2,924         163,580             --
   Investor relations,
      etc.                 2,922,435       2,922         657,970             --
   Repay loans             2,857,142       2,857         159,268             --
   Research and
   Development               356,095         356         150,929             --
Stock issued to
    return shares
     used  to acquire
     Thunderstick and
     Megappliance            624,000         624          39,096             --
Stock issued to
  purchase Thunderstick      500,000         500           4,500             --
Stock issued to
  purchase corporate
  shell (CrossCheck)         100,000         100          34,542             --
Deferred Compensation
Net Loss                          --          --              --             --
                          ----------     -------         -------       ---------
Balance, December
   31, 2000               34,145,276     $34,145      $4,624,535     $(  34,355)


Stock Issued for
Cash                       7,600,000     $ 7,600      $   92,400             --

Subscriptions
   Receivable Paid                                                        7,440
Stock Issued for Cash      6,620,000    $  6,620      $  200,587             --

Stock Issued for
   services               34,992,953    $ 34,993     $ 6,142,092             --
Stock Issued for
  Eqtima, Inc.               941,830         941           5,651             --

Net loss                          --          --              --             --
                          ----------    --------      ----------          -----

Balance,
  December 31, 2001       84,300,059   $  84,299     $ 5,537,382       ( 26,915)
                          ==========   =========      ==========       ========
The accompanying notes are an integral part of the financial statements.







                     HOUSEHOLD DIRECT INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT
                                   (CONTINUED)




                                                          Deficit
                                                           During        Total
                            Options        Deferred    Development  shareholders
                           Outstanding    Compensation     Stage        Deficit
                           -----------    ------------  -----------   ----------
2000

Stock issued for cash,
  rights offering                --                          --         122,507
Stock issued for cash            --                          --       1,139,187
Stock issued for cash
   and services                  --                          --         524,266
Stock issued for
 Services:
   Salaries                      --                          --         166,504
   Investor relations,
      etc.                       --                          --         660,892
   Repay loans                   --                          --         162,125
   Research and
   Development                   --                          --         151,285
Stock issued to
    return shares
     used  to acquire
     Thunderstick and
     Megappliance               --                           --          39,720
Stock issued to
  purchase Thunderstick         --                           --           5,000
Stock issued to
  purchase corporate
  shell (CrossCheck)            --                           --          34,642
Deferred Compensation                      (15,000)                    ( 15,000)
Net Loss                        --              --    (3,897,711)    (3,897,711)
                          --------        --------       ---------   ----------
Balance, December
   31, 2000             $  125,131        $     --   $(6,761,661)   $(2,012,205)
                         =========        ========     =========      =========


Stock Issued for
   Family Savers Inc.           --              --           --         100,000

Subscriptions
   Receivable Paid              --              --           --           7,440

Stock Issued for Cash           --              --           --         207,207

Stock Issued for
   services                     --              --           --         649,202

Stock Issued for
  Eqtima, Inc.                  --              --           --           6,592

Net loss                        --              --   ( 1,521,753)   ( 1,521,753)
                           -------         -------    ----------      ---------

Balance,
  December 31, 2001        125,131              --   ( 8,283,414)   ( 2,563,517)
                          ========         =======    ==========     ==========



The accompanying notes are an integral part of the 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.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.





                              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.

America's Hometown Brand Center Hometown Brand Center

In November  2000,  the Company  announced  it had entered  into an agreement to
purchase  100% of the  outstanding  shares of  America's  Hometown  Brand Center
Hometown Brand Center, Inc. (AHBC). The agreement called for total cash payments
of  $350,000 in the first 90 days.  $100,000  due at closing  and  $250,000  due
within 90 days.  The closing  should have taken place on or before  December 20,
2000. The Company did not have the cash available to make the initial  payments.
On January 25, 2001 the agreement was terminated.

Family Savers Acquisition

The Company  announced on July 9, 2001 that it had entered  into an  acquisition
agreement with Family Savers, Inc. private wholesale buying club, with more than
20,000 active  members  serviced by two locations in South Carolina and Florida,
and a profitable  operating history spanning eight years. The Company planned to
migrate some 4,000  additional  members  retained  from its  agreement  with the
former PCS Club of Atlanta, Georgia and Birmingham,  Alabama, into the sphere of
Family Savers,  thus forming a single centralized  product sales and fulfillment
hub under the corporate banner.

The purchase price was $500,000. The Company advanced $50,000 on the acquisition
but could not forfill its obligation and the acquisition  was terminated.  there
is no legal action pending on the cancellation.

Eqtima, LLC

On December 17, 2001 the Company  announced an  acquisition  agreement  had been
signed by the Company to purchase 100% of Eqtima LLC. The initial  consideration
given by the  Company  was  941,830  shares  valued at $6,592.  Certain  working
capital was to be  transfered  by the Company to Eqtima that has not been done
as of this date.  Based on the non-transfer of working capital by the Company to
Eqtima the acquisition has been placed on hold pending adequate financing by the
Company.


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 $8,233,414 for the period from May 18, 1998
(inception)  to December 31, 2001, and has used cash in operations of $2,205,133
for the period from May 18, 1998  (inception)  to December 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.



                              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, 2001, 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.

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 assets to the amount expected to be realized.

NOTE 3.  ACQUISITIONS AND SALES

Preferred Consumer Network International, Inc. ("PCNI")

On July 10, 1998, the Company acquired PCNI in exchange for 10,000,000 shares of
common stock at $0.001 par value per share.  This  acquisition was accounted for
by using the purchase method of accounting,  and accordingly the deficit assumed
was initially recorded by the Company based on estimated fair values at the date
of acquisition:



               Deficit                               $   (693,716)
               Goodwill                                   703,716
                                                          -------
               Purchase consideration                $     10,000
                                                          =======



On December  31,  1998,  the  Company  sold PCNI to a major  shareholder  of the
Company for $1 and the payment by Mr. Folger to the Company of $190,622 due from
PCNI to the  Company.  Two  officers of the Company  are  currently  involved in



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


NOTE 3.  ACQUISITIONS AND SALES (Continued)

winding up the business of Preferred Consumer Network  International,  Inc. PCNI
had  entered  into  an  operating   agreement  with  United  Buyers  Service  of
Massachusetts  and Connecticut,  which was engaged in the sale of memberships in
and the  operation  of a  consumer  wholesale  buyers  club.  As a result of the
failure  of these  businesses,  certain  payroll  taxes  were left  unpaid.  The
Internal Revenue Service ("IRS") has instituted  collection of the payroll taxes
and placed liens on certain real  property of Mr. Folger and Ms.  Jameson.  Both
parties are currently  attempting to obtain and complete a settlement of the IRS
claims.

Thunderstick, Inc.

On May 7, 1999, a related party loaned to the Company 500,000 shares of .001 par
value per share  personally  held common stock (par value $5,000) of the Company
which the Company utilized for 50% of the purchase  consideration for all of the
stock of  Thunderstick.  The Company agreed to replace the shares so applied and
therefore, $5,000 was included in amounts payable to related parties at December
30, 1999.  The  outstanding  portion,  500,000 shares of common stock (par value
$5,000),  was issued in May 2000 by the Company from its authorized but unissued
common stock.

This  acquisition  was accounted for by using the purchase method of accounting,
and accordingly  the equity assumed was initially  recorded by the Company based
on estimated fair values at the date of acquisition:




                 Equity                               $   28,580
                 Negative goodwill                       (18,580)
                                                          ------

                 Purchase consideration               $   10,000
                                                          ======


The market  value of the  Company's  shares on May 7, 1999 was $0.346 per share,
equating  to a  value  of  $346,000.  Based  on the  substance  of the  purchase
agreement,  as well as the  underlying net assets of the acquired  company,  the
transaction was recorded at fair value and subsequently  written down to the par
value of the Company's shares.  The non-current  assets of the purchased company
were reduced by the negative goodwill.


Megappliance, Inc. ("Mega")

On September 9, 1999, a related party loaned 124,000  shares of personally  held
stock of the Company  valued at $34,720 to the Company which was utilized by the
company to acquire certain asset of Mega. This  acquisition was accounted for by
using the purchase method of accounting, and accordingly the assets assumed were






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

NOTE 3.  ACQUISITIONS AND SALES (Continued)

initially  recorded by the Company based on estimated fair values at the date of
acquisition:



             Computer equipment                   $ 16,000
             Goodwill                               18,720
                                                    ------
             Purchase consideration               $ 34,720
                                                   =======


The Company replaced the shares so applied on August 2, 2000.



NOTE 4.  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.  In the years 1999 through 2001,  they deposited cash of $974,682 and
withdrew cash of $572,763. They loaned their personal shares of the Company that
were used to pay vendors  valued at $275,235.  They also loaned their shares for
the acquisition of Thunderstick and Megappliance valued at $39,720.

As of December 31, 1998, John Folger wholly owned PCNI. During 1999, the Company
made payments  totaling  $190,622 on behalf of PCNI. It was determined that this
amount would not be collected by the Company and  therefore  written off against
the  amounts  payable to Mr.  Folger.  In year 200,  John Folger and Ann Jameson
received 2,857,142 common shares of the Company valued at $162,125 in payment of
a significant  portion of their loan. In 2001 they received  8,736,020 shares as
compensation  valued at  $106,155.  The balance of the loan due them on December
31, 2001 was $317,918.


NOTE 5.  PROPERTY AND EQUIPMENT


Property and equipment consisted of the following at December 31, 2001:



           Office equipment                     $   56,236
           Motor Vehicles                           49,565
                                                   -------
                                                   105,801
            Less:  accumulated depreciation      (  65,259)
                                                  --------

                                                 $ 113,989
                                                   =======

Depreciation  expense for the two years ended December 31, 2001 were $13,467 for
2001 and $57,760 for 2000.




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


NOTE 6.  FORMATION OF ADDITIONAL SUBSIDIARIES

During the year 2000, the Company formed  additional  wholly owned  subsidiaries
for the purpose of expanding and pursuing other related business  opportunities;
none of which subsidiaries are, or have been, actively engaged in business.

NOTE 7.  AGREEMENT WITH PERSONAL CONSUMER SERVICES, INC.

 During the early part of 1999,  the  Company  entered  into  negotiations  with
Personal  Consumer  Services,  Inc. (PCS), a third party  wholesale  buying club
located in Atlanta,  GA. In order to sustain PCS's operations and maintain their
brand name integrity,  the Company  advanced PCS in 1999 $256,235  against their
accounts receivable and prospective membership renewal fees. In 1999, because of
the  uncertain  value of PCS's  underlying  accounts  receivable  and  continued
membership participations, the Company expensed $256,235 as bad debts.

In January  2000,  the Company  finally  entered into a service  agreement  (the
"Agreement")  with PCS.  The Company was to provide  services for PCS members in
exchange for a base fee and monthly  retainer as defined in the  Agreement.  The
Agreement  expires  in  December  2005 with an option to extend  the term for an
additional five years. As of December 31, 2000, the value of what the Company is
owed is approximately

$600,000 from PCS, of which $595,500 has been recorded as deferred revenue.  The
Company has had no prior  history of  collection  on this  receivable,  which is
secured  by  only  membership,  and  accounts  receivable  of PCS  that  in most
instances are at least one year old.  Because of this fact,  the Company has set
up a reserve of $541,500  against the receivable  which is offset as a reduction
of deferred  revenue.  In 2000, the Company advanced $190,060 to sustain the PCS
operation.  Because of the uncertainty of the receivable,  the Company  expensed
the advance of $190,060 as bad debts. In November,  2000 and January,  2001, the
Company  closed the Atlanta and  Birmingham  operations  to conserve  cash flow,
respectively.


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


NOTE 8.  INTANGIBLE ASSETS/GOODWILL



       Eqtima                                       $ 6,593
       Megappliance                                  18,720
                                                     ------
        Total                                        25,313

       Less:  Accumulated Amortization               9,565
                                                     ------
                                                    $15,748
                                                     ======


For the two years ended December 31, 2001 and 2000,  amortization  of Intangible
Assets was $3,744 and $2,080, respectively.


NOTE 9.  PURCHASE OF CROSSCHECK CORP.("CROSS")


On March 9, 2000,  the  Company  executed an  Agreement  and Plan of Merger with
Cross and a Letter of 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.

Pro-forma  information is not presented for this acquisition  since Cross was an
inactive company with no significant assets and liabilities.


NOTE 10.  INCOME TAXES


 The Company accounts for income taxes in accordance with Statement of Financial
Accounting  Standards  ("SFAS")  No. 109,  "Accounting  for Income  Taxes" which
requires  the use of the  "liability  method" of  accounting  for income  taxes.
Deferred  income  taxes  reflect  the net tax  effect of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amount used for income tax purposes.

The Company had NOLs of approximately $8,233,414 at December 31, 2001, primarily
because  of  the  development  stage  expenses.  These  NOLs  and  corresponding
estimated tax assets, computed at 35% tax rate, expire as follows:




          Year loss        Expiration        Loss           Estimated
           incurred           Date          Amount          Tax Asset

             1998            2018       $   638,684       $   223,940
             1999            2019         2,225,266           778,843
             2000            2020         3,897,711         1,364,199
             2001            2021         1,521,753           532,113
                                          ---------        ----------

         Total                            8,733,414         2,899,095
         Valuation Allowance                               (2,899,095)
                                                            ---------
                                                          $        --
                                                            =========





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

Realization  of deferred tax assets  associated  with the NOL is dependent  upon
generating  sufficient  taxable  income  prior to their  expiration.  Management
believes  that  there  is  a  risk  that  these  NOLs  may  expire  unused  and,
accordingly,  has established a valuation  allowance against them. The valuation
allowance  of $223,940  as of  December  31,  1998 was  increased  by  $778,843,
$1,364,199,  and 532,113 in 1999, 2000 and 2001, respectively,  as a consequence
of recognizing additional deferred tax assets in those years.


NOTE 11.  NOTE PAYABLE


On August  18,2000,  the Company  entered into a note payable  agreement  with a
third party for $35,525 to lease 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.





                    2002                      $   6,212
                    2003                          6,376
                    2004                          6,545
                    2005                          3,898
                                                 ------
                                              $  23,031
                                                 ======


On February 12, 2001 the Company  borrowed $50,000 due in one year with interest
at 5%. The note is convertible to shares.

NOTE 12.  COMMITMENTS AND CONTINGENCIES

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.com,  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.

Operating Leases

The Company leases  certain office space under an operating  lease that requires
monthly  rental  payments of  approximately  $850 and expires June, 2002.
Total rent  expense for the Company totaled  $28,832  for the year ended
December 31, 2001 and $22,698 for the year ended  December  31,  2000.



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




NOTE 12.  COMMITMENTS AND CONTINGENCIES (Continued)


Internal Revenue Service Contingent Liability


PCNI, a temporary  wholly owned  subsidiary of the Company during five months in
1998, was subsequently  purchased and is currently owned by another  shareholder
of the Company.  PCNI has been assessed a tax liability by the Internal  Revenue
Service  ("IRS")  for  taxes,  related  to  wages  paid  to  employees,  for  an
approximate  total amount of $83,000.  It is the opinion of the Company's  legal
counsel that this liability will not significantly impact the Company.  However,
there is  currently  no legal  determination  as to whether  the  Company may be
liable,  at some point,  for the entire  amount.  As of December 31,  2001,  the
Company  recorded  approximately  $11,000 of this  liability  that was  incurred
during the time of  temporary  ownership.  This  amount is  included in accounts
payable in the accompanying consolidated balance sheets.

Officers Employment Agreements

During the year 2001,  the Company  had  employment  agreements  with two of its
employees with annual salaries of $75,000 per year with remaing terms of up to 5
years. Maximum annual incentive bonuses based on earnings are up to $125,000 per
year.

The Company may be subject to other  various legal  proceedings  and claims that
arise in the ordinary  course of business.  Management  currently  believes that
resolving  these  matter(s) will not have a material  adverse  impairment on the
Company's financial position or its results of operations.





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


NOTE 13.  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.

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.

For the year 2001:

1.   The Company issued 34,992,953 common shares: consulting services- financial
     valued  at  $428,796,  maintenance  of  software  and  operations  $80,151:
     officers bonus,  $40,373:  legal fees $34,100:  salaries $65,782. the total
     value of the stock issued was $649,202.

2.   The Company issued 941,830 common shares as part of the purchase of Eqtima,
     Inc. valued at $6,593.

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 30% to 47.6% of the market values in the year ended December 31,
2000 and 2001.

Detail Stock Transactions

For the period from May 18, 1998 to December 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



                                                   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
                                                   ==========            =======




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

NOTE 13. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

1999
----


                                                    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
                                                    =========         =========




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


NOTE 13. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

2000


                                                    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






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

NOTE 13. CAPITAL STOCK (Continued)

Detail Stock Transactions (Continued)

2000



Stock 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
                                                ==========           =========


2001

Stock issued for investor relations, consulting technical and professional fees:



                                                  Number of
                            Issue Date              Shares              Amount

                            February  01           250,000            $ 16,415
                            February  02            20,000               1,093
                            February  16            33,333               1,822
                            February  20            50,000               2,734
                            February  20            50,000               2,734
                            February  20           100,000               5,468
                            February  28            50,000               2,734
                            March     30           100,000               4,375
                            March     30            62,500               2,734
                            March     30           290,000              12,688
                            March     30            50,000               2,187
                            March     30           571,429              32,000
                            April     16            50,000               2,800
                            April     16           500,000              28,000
                            April     16           205,714              11,520
                            April     16            50,000               2,800
                            April     16           200,000              11,200
                            April     16            25,000               1,400
                            April     16            20,000               1,120
                            April     18           150,000               7,350
                            April     19            90,909               3,818
                            June      07           100,000               2,800
                            June      07            10,000                 280
                            June      11           215,385               6,031
                            June      28           750,000              15,750
                            June      28         1,500,000              31,500
                            July      20         2,100,000              73,500
                            July      20           150,000               5,250
                            July      20           100,000               2,800
                            July      31           200,000               5,600
                            September 12         1,120,818 a            11,208
                            September 12         2,162,337 a            21,623
                            September 18         1,000,000 a            10,000
                            September 18           220,028 a             2,200
                            September 18         1,500,000 a            15,000
                            September 19         1,000,000 a            10,000
                            September 19         1,000,000 a            10,000
                            September 19         1,800,000 a            18,000
                            September 21           855,000 a             8,550
                            October   01         2,250,000 a            69,750
                            October   04         1,000,000              16,100
                            October   31           150,000 a             1,200
                            October   31           454,480 a             3,636
                            November  12         1,000,000               5,600
                            May       31            50,000               1,750
                            May       31            50,000               1,750
                            May       31           100,000               3,500
                            May       31            50,000               1,750
                            July      02           100,000               2,800
                            July      02           100,000               2,800
                            November  15           200,000                 980
                            December  17           400,000               4,400
                            December  17         1,600,000              17,600

a. Shares issued pusuant to 2001 employees stock option plan filed on Form S-8

Stock issued for employee compensation

                            September 12         1,973,337              19,733
                            September 12         2,064,000              20,640
                            October   10         4,698,683              65,782

Stock issued for cash

                            June      12         7,600,000             100,000
                            October   03           400,000              12,500
                            October   05           500,000               4,190
                            October   12           660,000               7,941
                            October   15         5,000,000             180,000

Stock issued to purchase Eqtima LLC
                            December  31           941,830               6,593


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

NOTE 14.  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 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:

      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
                                                                =========


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


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


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.